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Creating financial goals is hard.
There’s a reason why most New Year’s resolutions fail. Since you’re reading this blog we know that you don’t wait till the start of a new year to set goals. You’re an action-taker.
Still, you need to set goals that are specific and actionable. Otherwise, you’ll fail from the start.
The good news is that you can learn how to set great goals and secure your odds of achieving them. Here’s your ultimate guide to creating goals that’ll inspire you into action.
Valuable Lessons I Wish I’d Known To Achieve Goals
I’m not a goal expert–if there’s such a thing.
But, I have experienced success after learning from my mistakes. Regardless of which goal you’re setting, the principles stay the same. I was clueless a few years back when I was thousands of dollars in debt.
My excuse for not creating a budget back then was that I was good at math; this was a huge mistake. At the time, I didn’t set goals.
But, everything changed when I admitted to myself that I was living paycheck to paycheck. I realized that if I lost my job, I’d be in big trouble. My goal was to pay down $6000 in credit card debt.
I began reviewing my income and estimated how much extra money I’d have to pay down my credit cards. I committed myself to paying down my entire credit card balance in 18 months.
At the time, I didn’t know what smart goals were, but I’d set a clear goal for the first time. Since then, I’ve set different goals and have experienced more success. I’ve learned that without setting clear goals achieving anything is nearly impossible.
The problem with my previous goals was that they weren’t specific. But, this doesn’t have to be your fate. The principles you’re about to learn can also help you reach financial success.
Do This One Thing Before Setting Any Goal
Imagine becoming inspired after watching a documentary or reading an article.
You then set a goal that comes to mind at that moment. A few weeks later, you give up and wonder why you’d failed. The problem was setting a goal that wasn’t meaningful to you.
Instead, take the time to set meaningful goals. Here’s why great goals take time–a lot of time. If you’re going to invest a big part of your time in anything, it should be worthwhile.
Meaningful goals don’t have to be significant. They only have to mean something to you. Here are some examples:
- Retire at age 45
- Save 10k in 16 months
- Be credit card debt-free in 12 months
- Build a $1000 emergency fund
A benefit of setting meaningful goals is that you’ll be more committed. And, when the going gets tough, you’ll be more likely to stick around.
Your Goals Need To Be Smart, Not Dumb
Most likely, you’ve already heard of S.M.A.R.T goals.
These are goals that are specific, measurable, attainable, relevant and time-bound. The bottom line, setting smart goals is the best way to achieve anything.
Imagine being in a large city with no map and no destination. On top of this, you have no deadline.
In the scenario above, you can expect never to reach a destination. That’s what it’s like to set goals with no deadlines or specific outcomes. After choosing a meaningful goal, the next step is to make it smart.
For example, wanting to be debt-free is a great goal but not attainable. Instead, make it smart by stating you’d wish to pay off $6000 of your credit card debt in 18 months. Now you have a deadline and a specific goal you’d like to achieve.
When in doubt, break down the S.M.A.R.T acronym to ensure your goal meets the criteria for being attainable. It’ll take more work initially, but eventually, setting smart goals will get easier.
The Harsh Truth On Why You Keep Failing
“Failure is simply the opportunity to begin again, this time more intelligently.” –Henry Ford
The truth is that even with smart goals, you can fail.
Have you ever decided to lose 10lbs or gain muscle within a short period, only to fail?
It’s not enough to set great goals. Even with meaningful goals, you’ll hit roadblocks. So what’s the solution?
Make small progress with micro-goals. Like regular goals, your micro goals will be smart. All your doing is breaking down your main goal into smaller chunks.
From my previous example of paying off $6000 in credit card debt, you’d break this goal down to paying $333 each month. Taking it a step further, you can then break it down to paying $11 daily.
Smaller goals are more attainable and will have you feeling less overwhelmed. But, another benefit is not triggering your amygdala’s fight or flight response. Your amygdala is a small almond-shaped piece in your brain that stores your emotions.
In the past, your fight or flight response protected you from predators. Today, your fight-or-flight response gets triggered by non-life-threatening events.
By breaking your goals into smaller goals, you avoid triggering your stress and fear emotions that prevent you from taking action towards your goals.
10X Your Odds Of Succeeding Using This One Tool
How should you review your goals?
Do you type them on your computer and review them every few weeks? You can, but it will be easy for you to lose track. Instead, write down your goals daily in a journal.
Why? Because writing down your goals will increase your odds of succeeding.
A journal is a great tool to do this because you can track your progress. I tend to review my tasks daily, noting which ones I’ve completed or couldn’t achieve. Think of your journal as your roadmap to reaching your goals.
Break your main goal into weekly chunks and continue to do so until you have daily goals. Then, track your progress for which goals you’ve completed and need to complete next.
Your Blueprint Containing Smart Financial Goals
If you can’t tell by now, setting goals requires a lot of work.
But don’t let this stop you from taking the time to prepare. Setting goals is a different process for everyone, but all great goals are SMART. Now that you know the basics of goal setting, here are a few goals you can use to inspire you to take action.
1. Earn More Money
Goal: Build a side hustle in 6 months that generates $100 in monthly income.
High-level action plan:
- Choose a side hustle that interests me and that I have expertise in
- Learn from people who are already succeeding in my chosen hustle
- Break down strategies into micro-goals to track daily for six months
- Take action on proven strategies to land my first client or paid opportunity
2. Spend Less Money
Goal: Review my monthly expenses and save $100 in 3 months.
High-level action plan:
- Sign up for Personal Captial and sync all bank accounts to track spending
- Find my most significant expenses and do basic research on potential savings
- Breakdown my goal into micro goals to review for the next three months
- Start calling companies to negotiate for lower rates.
3. Pay down debt
Goal: In 12 months, pay $1000 towards principal debt balances.
High-level action plan:
- Use Mint to determine the total debt I owe
- Break down my goal into micro goals to review for the next 12 months
- Focus on paying debt with the highest interest first
- Brainstorm ways of paying an extra $83 ($1000/12) each month toward my debt
Some of the goals above will need more thought than others, but this is a great place to start.
What Most Aren’t Telling You About Goal Setting
It’s great to read articles that inspire you to set great goals and take action.
The problem is that most articles fail to tell the truth behind goal setting.
That it’s not easy when you’ve never practiced any of the methods mentioned above.
You’ll most likely fail at goal setting initially, but this is normal.
The first time I learned about goal setting, I thought I could do anything. Fast forward a few months, and I’d made dozens of mistakes.
For example, I got into the habit of focusing too much on the daily tasks that I headed in the wrong direction.
You’ll often find it comforting to complete the same tasks each day since you’ll get used to them. But, I challenge you to review your progress each week to ensure you’re on track to reaching your goal.
How can you estimate how long it would take you to earn extra money each month? You can’t. You can only do your best to make an educated guess. One of the most important steps in goal setting is learning when to pivot.
Whether it’s day one or day 50, make sure you’re heading in the right direction. And if you’re not sure where to head next, make it your next step to finding out. Above all, don’t rush the process.
Whether you want to earn more money or lose weight, don’t become obsessed with the outcome. I was guilty of this. Although I was being productive in reaching my goals, I felt miserable.
What’s the point of reaching your goals if, in the end, you’ll be unhappy?
Focus more on loving the journey instead. You’ll be more likely to succeed and be happy when you reach your goals.
Here’s How To Start Reaching The Financial Success You Desire
“Set your goals high, and don’t stop till you get there.” –Bo Jackson
Now that you know how challenging goal setting is don’t let it discourage you.
I promise it gets easier. The truth is reaching your goals won’t be sexy. At times you’ll be doing tasks you don’t want to do but need to complete to reach your goal.
When you fail, don’t view it as a negative thing. View your failure as a lesson in disguise, and use it to make better decisions in the future.
Imagine becoming debt-free or saving thousands of dollars each year. Amazing right?
Don’t let your finances or past failures stop you from reaching the goals you desire.
Now, what big goals will you set today?