Have you ever dived into a project and then had to take a step back and rethink about the best way to go about it? I’ll provide a very basic example.
A couple of months ago we moved my study (desk and chair) into the basement and converted the upstairs room into a playroom for our kids. And this past winter break, we decided to make space in this playroom for a small desk and chair for our son to use for reading, homework, etc.
We started reshuffling toys and just sliding them from place to place within the room. Quickly, we realized this isn’t working right. So we took a step back and thought about the best way to optimize the space. It turns out we won’t have toys near the window because that’s where we want the desk to be in order to get sunlight and a view outside.
This goal of incorporating a working area within the playroom gave us energy. We started to organize and clean the playroom to create the needed space, we started looking for desk online, we measured what could fit, type of chair that can go along with it, how much we want to spend, and which items should be on the desk to not overcrowd his working space.
You get energy from setting goals because you are excited about reaching the finish line.
In our case, it’s what the end result would look like, a playroom/study for the kids where they can spend time in work and play. Not to mention the family room all for me. 🙂
Financial Goals Provide Mental Energy
It’s the beginning of the New Year. We have already set or are in the process of setting our goals.
Since this is personal finance site, I’ll talk a bit about financial goals. If your goals are to continue along your financial plan, that is fine. This can mean continuing to add to your existing investment allocation, or counting to pay down debt. It means you’re disciplined.
And if your goals are to increase your investment contributions further that’s fine too.
In both cases you are moving forward, not backwards. And in today’s stock market, you may even be buying investments at reduced prices. Just the other day, I took the dividends I accumulated over the past couple of months and bought a couple of index funds already in my portfolio, ofcourse at lower prices.
Your goals should focus on holding yourself accountable. Fairly soon, and maybe to be discussed in a later post, I’ll assess how my finances fared over the past year. Since the market dropped almost 7%, I only expect subpar performance from my investments.
Source: Market Watch
From January 2018 to December 2018, the S&P 500 dropped over 200 points.
But there are other factors to consider when assessing my overall financial picture? Did I consistently save a respectable percentage of income and invest it? Did I control my debt? Did I consistently put money towards the kids’ college savings plans? If I can answer yes to these questions with the numbers to back it up, I’ll gain comfort that my financial plan is working and goals are being achieved. If not, I’m holding myself accountable and figuring out ways to make adjustments to address these factors.
Physical Health Goals Provide Body Energy
I got back to the gym after 10+ days off. I was pumped to go back – i.e., had more body energy I wanted to use up. And admittedly throughout the holidays, I was mostly at home eating junk and lounging around.
After working out, I felt better than usual, maybe because I had not been at it for a while. The goal was to do cardio for more than 25 minutes, which is what I usually do and I was able to achieve it with ease. I attributed the success to the combination of energy and mental preparation before going to the gym.
After You Set Your Goals
The most automatic and logical thing to do after setting a goal is think about how you’re going to achieve it. Maybe you’re backwards a bit and think of things you can do and form all of them into one big goal. For example, if you’re thinking of paying down some debt and increasing your 401k contributions, an overarching goal could be to obtain a higher paying job. This can give you the energy to start looking for positions, contacting recruiters and former colleagues, and sending your resume out.
And just like many tasks, break your goal up into little bite sized tasks.
I’ll keep going back to the savings and investing examples. If it’s to save a certain amount of percentage, start by making a list of your income streams and expense items. Lay everything out and see where you can optimize or increase income and reduce expenses. Maybe you can make another list that impacts the actions you would take, e.g., taking on a side gig may mean more time away from family and friends. Is it worth it?
Keep Your Goals Reasonable
It’s important to set reasonable and realistic goals. It’s important because you want to be a position to make progress and ultimately have the capability to achieve them.
If you haven’t contributed to a 401k at all and expect to contribute the maximum this year with the same salary and expenses, one may argue that it is not a reasonable goal. Consequently you’ll drain your energy and may end up frustrated.
Keep You Goals In Plain Sight
For me, I keep a tab on my budgeting spreadsheet that has my goals. I am almost forced to see it whenever I open up my budgeting spreadsheet. If you create an environment that forces you to see and work on your goals as part of your normal routine, it makes achieving your goals a lot easier.
There is a whole book about this called Atomic Habits by James Clear. It mainly talks about installing good habits. And one way to achieve your goals is installing the habit of keeping them in plain sight so you continue to remain focused on those goals.
Even when I was studying for the CPA exam, I remember using post-it notes on the bathroom mirror with cost accounting formulas and tax rules. I’d look at these notes on average of 3-4 times per day. The system allowed me to create an environment around myself to help me achieve my goal of passing the exam.
So get out there and aim for your goals. You’ll be surprised at the energy these goals can generate.
Join The Discussion:
- What are your goals for the New Year?
- What’s the next step you take after setting up your goals?
- Has the completion of a goal propelled you to identify and work on another goal?
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