We talk a lot about working to achieve financial goals on this blog. But one thing we haven’t addressed much is how striving for lifelong goals can be the game changer when it comes to staying motivated for your financial goals. Today we’re going to change that.
This idea occurred to me when I was working with Ms. Career Girl on the Money Makeover Series. One of our participants is doing well financially, but struggles to stay motivated because she isn’t sure what she strives for outside of financial independence. Without having a lifelong goal that financial independence can enable her to achieve, it’s difficult for her to buy into keeping a frugal lifestyle rather than doing whatever she wants with her money. That’s when I realized our budgeting talks needed to turn to life talks.
She and I are still working to find out what her lifelong goals are, but there is no question that, when she finds them, she’ll be that much more motivated to stick to her financial goals. You see, keeping a strong financial philosophy is hard to do if you don’t know why you’re doing it. Some of us have gotten used to living with debt, used to not having an emergency fund, and aren’t worried about retirement until it’s too late.
That’s why it’s important to know what else you want in life besides financial independence. We all need something more, something that will make financial sacrifices feel worth it in the long run. A strong financial future is truly a tool to living the life of your dreams. Now let’s talk about how to make that happen.
Finding Your Goal
Before you can figure out what goal to strive for, you’ll want to do some soul-searching. Putting all thoughts of finance aside, what do you want? What would you do if you had no limitations – financial or otherwise? Dig deep here. The sky’s the limit!
For some, this goal might have something to do with your lifestyle. Maybe you’ve been renting for years and would love to own a home. While this may seem like a financial goal, it can be much more than that. If you want to own a home, you’ll have to decide if you’re really where you want to be five years or more from now. If you’re not in that place, where would that place be? If it’s somewhere else, the first step will be planning new goals such as how you can afford to move and find a job in that area.
Another lifestyle-oriented goal could be the exact opposite of buying a house – such as becoming a world-traveler. (Now, I should clarify for a second – you may have a goal of owning a home and traveling frequently – but for the sake of this let’s just say that it’s one or the other.) In order to realistically pursue this goal, you’ll have to decide if your career will allow for this or if you need to find a different career that will.
Speaking of careers, maybe your soul-searching leads you to a career-oriented goal. For example: going back to school, starting your own business, or becoming a freelancer. If so, your financial goals might suddenly become more important since you’ll need a larger stash of emergency funds and money saved up to get you through. You may even have a dream of joining a career-type or industry that you know will pay less than what you’re making now. Again, by building your savings up as much as possible now, you’ll be more prepared when you make the switch.
Making Your Plan
Now that you know what you’re striving for, let’s talk about how you can use your financial goals to help you get there:
1) Prepare Your Finances
Does your goal require a monetary investment (such as a down payment on a house or money for graduate school)? If so, allocate money in your budget towards savings for that amount. What if your goal simply needs you to have more money set aside (such as a future industry change/pay cut)? Then you’ll want to pay off your debt and sock away as much as you can into a savings account that can’t be touched. Whatever the case may be, make sure you have the reserves necessary to hold you over with the new goal.
2) Set a Realistic Time Frame
When deciding how you’ll use your finances to prepare for your goal, don’t forget to have a clear vision of when you want the goal to be accomplished (or started if the case may be) and how much you’ll need to save each month to make it in time. If your ability to save is lower than this amount, then you’ll have to push out your goal achievement date to something more realistic.
3) Clear Out Any Obstacles
Is there anything standing in between you and your goal? Perhaps you have debt to pay off or you aren’t budgeting as much as you could towards your savings each month. It’s possible that you may need to take some time off in reaching for your higher goal so that you can focus on clearing out these obstacles. Just remember, doing this is getting you one large step closer to achieving your higher goal. So don’t view this as a hindrance, but rather a beginning!
We all know things like paying off debt and saving money are important. But doing so often calls for a total lifestyle change that isn’t particularly easy to stick to – especially if your journey lasts for a few years or more. But if you have a strong personal goal that you’re shooting for outside of your financial goals, it will be that much easier to stick to your financial goals. A little soul-searching can go a long way and you might find an even brighter light at the end of the tunnel!
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