Not another goal setting post…
It seems like anyone and everyone has the ‘hacks’ and ‘tricks’ to reach your goals in 2021.
With everyone searching for success and happiness, whatever that looks like to you, it’s easy to consume content about reaching those goals but never taking the necessary actions to really get there.
This article walks through the same process I use when setting financial goals and I hope it helps you create clarity in your life and make 2021 your best financial year yet.
Determine Your Values
Everyone has them - whether you value traveling, health, charitable giving, family time, or all the above, defining your values and priorities is crucial to setting goals.
Without knowing what you value, even if you reach your goals they probably won’t be too fulfilling.
Also by understanding your values, the chances that you’ll reach your goals are higher because they’re truly tied to you. You’re saving for things that are valuable to you.
This first step of getting a clear understanding of your values will allow you to create goals that bring the most fulfillment and happiness.
✅ Take a couple days to think about what you value and what you want to accomplish this year
💬 My current values: Health, travel, family, giving back to my community
Evaluate Your Situation
Understanding where you are is a key part to getting where you want to go.
When was the last time you took inventory on your financial situation?
Do you know exactly how much you have in savings and how much debt you have?
✅ Spend 2 hours tonight and figure out:
How much you’re making each month
How much you’re spending each month
What your debts are (write them out)
What your assets are (home equity, investments, savings, etc)
💬 How I Do This: I started using Marcus by Goldman Sachs in 2020 and it’s been one of my favorite personal finance apps. The reason I started using it was for their High-Yield Savings account, which I use for my emergency fund however I learned there’s a lot more you can do within the app.
You can link all of your bank accounts, investments, credit cards to the app and it’ll give you an overview of all accounts and their current balances. It also lets you view your recent spending and transactions and categorizes them so you don’t have to do it manually.
**no affiliation, just a happy user 😌**
Set Your Goals
Without goals, it’s easy to give up and let life take over your spending.
Even with the best intentions, not having goals you want to accomplish can hinder your chances of success.
Examples of Goals
Live on less than you make
Buy a home
Establish an emergency fund
Open an investment account
Start a business
✅ Take some time to think about what you want to accomplish this year
💬 Some of my own personal goals: Save another 3 months of expenses into an emergency fund, create another source of income, remain debt-free
Write Them Down
In my experience, writing down goals is one of the biggest factors in achieving them.
Back in 2018, I wrote down all my ideas and goals for starting Piertree Planning and since you’re reading this blog post, those goals ended up coming to fruition.
I really think that if I left those ideas in my head and never wrote them down that I never would’ve made it to the position I’m in today. I looked at those goals every day for 2 years and it served as a constant reminder to remember the bigger picture and keep working towards it.
✅ Write your goals down!
💬 I usually write all my goals on one piece of paper and refer back to it, but this year I'm going to try rewriting them every day when I write in my journal to see what it's like
Track Your Expenses
Understanding where your money is going will be a key to reaching your goals.
There’s many apps and tools out there to help with this. Choose one and commit to it.
Make it a habit to periodically check your recent spending to ensure it aligns with your goals.
✅ Use an app or your bank statements to review your spending
💬 Similar to the evaluation step, I either use Marcus by Goldman Sachs to review spending or simply log into my bank’s app and go through recent transactions
Saving every single dollar and never enjoying life is no way to live.
By treating yourself, you're rewarding your own hard work which will hopefully help create more success.
If you're someone who values experiences over material items, saving a little bit and taking a weekend road trip might be the motivation you need to keep saving for that experience over and over.
The key is to treat yourself on things that truly make you happy and give you something to look forward to.
If you hit one of your main goals for the year, take time to celebrate it!
✅ Treat yourself and don't forget to enjoy life
💬 Right now, I could be better about treating myself but each week I try to order takeout from a new restaurant or one of my past favorites. It gives me something to look forward to throughout the week and I just love food 😬
Not everything is going to be perfect. You're going to overspend sometimes.
Take a day or two every month to re-evaluate your goals and review your actions to make sure they're still getting you closer to where you want to be.
It's important to remember that while goals can be a large factor in success, you're the one creating the timeline and sometimes it's not perfectly accurate.
For example, if you set a goal in January to have 6 months of expenses saved in an emergency fund by the end of the year and by August you only have 1 month saved, it's not the end of the world.
Yes, you may have to adjust some spending habits but there's nothing wrong with reaching that 6 month emergency fund in February of the NEXT year rather than giving up August.
✅ Re-evaluate your goals to ensure you're on track to reach them
💬 I generally review goals daily, but re-evaluate them monthly because you'd be surprised how many things can change month to month when you know where you're trying to go
The Bottom Line
Setting goals takes some time. But the rewards you can get from reaching them makes the whole experience worth it.
If 2020 put your finances to the test, use 2021 to bounce back and build a stronger financial foundation than before.
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