Autumn is here and you’re just about to give up on the short-term financial goals which you set at the beginning of the year.
You are not alone. According to a recent poll conducted by Charles Schwab Corporation, only one in four Americans has a written financial plan. So, start by giving yourself a pat on the back. At least you took the time to make a plan. However, you may be struggling to keep up with the plan.
If that’s you, the same survey by Charles Schwab Corporation found out that you have plenty of company. The study revealed that three in five Americans struggle to balance their finances. They live from paycheck to paycheck.
Here’s some good news for you. Contrary to what you think, there’s nothing wrong with you. But, there must be something wrong with the goals that you set.
Here’s some more good news. Experiences of failure often mark the starting point of success. Behind every glamorous story of success, there’s often a story of an embarrassing initial effort or a major setback that triggered a radical change in the person’s life. For instance, Milton Hershey of Hershey’s chocolate was first fired from his apprenticeship. Soon after, he was the mastermind of three failed businesses before making radical changes to his approach and building his chocolate empire.
But a financial flop can only be a good turn-around point if you are willing to learn from it and make changes.
So, here’s your chance to learn why your short-term financial goals are missing the mark and what you can do to fix them.
You Didn’t Set any Goals
You had a financial wish list. What does this mean? Take a look at the short-term financial goals that you had set at the beginning of the year.
Be honest to yourself, did you write a list of financial goals or were you jotting down your dreams?
Sometimes we make out a wish list in our new year’s resolutions thinking that it is a list of goals. However, goals are not the same as what you wish for. Wishes are what we fantasize about. We frequently talk about them, sometimes pray about them and even daydream about achieving them but never really take actual steps to achieve them. On the other hand, goals are specific, measurable, attainable and time-bound.
For instance, if at the start of the year you wrote down a goal “to set up an emergency fund” but didn’t define how much you want to save by the end of the year, it becomes a dream. However, after reading this article you can change all that and define the amount and time.
Start by aiming to save at least $ 1,000 before the end of the year. You could be surprised at how fast you can achieve this goal. Try and cut back on your fun cash or use coupons for your shopping. You can get amazing advice from Money Saving Mom.com and amazing coupons deals at coupons.com and achieve that goal way before the year ends and start building your emergency fund.
You had too Many Goals
Closely related to the first error is having too many goals.
When the year begins we all get into a frenzy of goal setting. We set goals concerning our health, fitness, finances, relationships and so many other aspects of our lives.
It can be pretty exciting, which is good, – you need to be excited about your goals – but it’s also a pitfall. Quite often we get carried away with all that we dream of achieving and include it in our goals. We end up having too many goals.
If you have more than a dozen short-term financial goals you are on the dreamy side.
To eliminate this error, begin by figuring out what’s high in your list of priorities. It could be buying a house or clearing your overdue credit card balance and getting your house in order. Then proceed to other goals lower on the priority list.
Short-term goals are often what you’d want to achieve in less two years. For most people, the two most crucial short-term financial goals are eliminating high-cost debt such as credit card debt and setting up an emergency fund.
So, go back to your financial goals for the year, eliminate all other goals and leave these two. At least until the year ends.
You Weren’t Sufficiently Motivated and Listened to the Nay Sayers
The reason why many people fail or give up pursuing their short-term financial goals is they aren’t motivated or are detracted by the Nay-Sayers.
If you are not motivated or don’t have an understanding of why you are pursuing a particular short-term financial goal, you’ll probably find it hard to accomplish it and abandon it.
You can draw motivation from just about anything, as long as it keeps you freakin’ excited and constantly thinking about achieving it. Motivation is what keeps you talking about your goals nonstop and drives you to sacrifice important things, like your comfort or the shopping sprees or gadgets.
Motivation is personal and not what others tell you. If you tend to listen too much to what others say, you could end up giving too much attention to the nay-Sayers. Don’t believe what they say. Your goals could be very stretching and may seem impossible to achieve. But when you break them down to attainable monthly steps, you can achieve. Don’t listen to the detractors.
You Didn’t Tell Anyone About your Goals
This is a paradox of the point above. You may not want to hear too much from spectators and other people, but, you need to tell someone about your financial goals and listen to their opinion.
Your short-term financial goals may be very personal, but you need to share them with someone and be accountable.
Accountability is critical! The more stretching the goal, the more accountable you ought to be.
When you set goals without a system of being accountable, you are setting yourself up to give up. We all need someone to keep us on track, to cheer us and even reprimand us. Such support from someone close to you can make the difference whether you’ll achieve your short-term financial goals or not.
You can set up a meeting with a financial advisor and explain your objectives. It shouldn’t take too long, but getting another person’s input could give you a better perspective of what goals to prioritize, how to strategize and they can help you even to get started. If you have shared your goals with a personal financial planner, remember to schedule regular meetings not just to check on progress but also to explore new horizons.
A personal financial planner can help you put your objectives into proper perspective and create an achievable plan to attain your short-term and long-term financial goals.
Seeing Financial Goals in Isolation
A common error when making short-term financial goals is seeing them in isolation of other goals you have. Do you have career development goals? Relationship goals? Personal development goals? Chances are these goals have a financial implication and should be central to making your financial goals.
For example, if you have a goal to enhance your relationship with your spouse, the success of your savings goal will depend largely on how much you intend to spend on the dates and outings. The success of your debt reduction goals can be inhibited by personal development goals such as image make-overs for personal development. Your health goals can affect the amount of time you spend at work, therefore, the amount of money you make.
Financial goals are not silos in our lives. Rather, they are interconnected in the complex web of who we are.
You Didn’t Prioritize Your Goals
Initially, you were excited about setting your short-term financial goals and you went ahead to make a considerable effort towards achieving them. However, as the year progressed, you grew weary and other issues came up, distracting you from your goals and you end up spending more time and resources on the other seemingly more important issues.
These seemingly more important issues are more of detractors from your short-term objectives and you need to refocus and prioritize your goals.
So, don’t let loose and let yourself off the hook. You need to stick to the behaviors and hold yourself accountable. If you’re struggling, try setting up more frequent meetings with your accountability partner, or take slightly more stringent measures. Eventually, you will develop lasting habits that’ll be the foundations of a positive change in your financial life.
Not Revisiting or Reviewing Your Goals
Lastly, have you been revisiting and reviewing your short-term financial goals? Have you been adjusting your actions and expenditures to suit the objectives?
Like a barista would stir coffee, you need to keep revisiting and reviewing your goals. You need to keep adjusting your actions to changes in expenses, take advantage of investment opportunities and set aside extra saving amounts.
So, set a review cycle, say, every end month or bi-monthly, to assess the proximity of attaining or exceeding these goals.
In conclusion, these basics will help you get back on track with your short-term financial goals.