Have you missed some of your short term financial goals?
I know I have. In fact, March 5th, 2018 on my 31st birthday, I made a pretty bold statement:
We will pay off $100,000 in Student Loans in 365 days!
Like Ray Kroc in the movie “The Founder,” it was an all or nothing type of proclamation… (OK I embellish, it wasn't that serious).
Writing in a blog post that you want to pay off $100,000 worth of debt in 365 days is a little bold. Self-admittedly so, it is was also a very LOFTY goal. There was going to have to be quite a few things work in our favor to accomplish it.
(Side note: Speaking of LOFT – if I don't get my wife out of that store we won't pay off anything, JK but that store needs couches).
Now here is the kicker – we didn't hit our goal! In fact, we came up roughly $30,000 short, paying somewhere in the neighborhood of $70,000 in student loans. Which leads me to this:
It is OK to miss your short term financial goals.
Quite honestly, if you are hitting every financial goal you probably don't have them set high enough. Do the calculation.
For example, if you are constantly hitting your savings goal of $200 per month with ease, it might be time to increase the amount your contributing.
Goals are meant to stretch us, they're meant to guide us, and goals are meant to encourage us – our short term financial goals shouldn't be any different.
Missing your financial goals is part of life.
At the beginning of the summer, I wrote down things I wanted to get done. Let's just say most of it didn't happen. My house repairs never got done and neither did staining my fence.
There was also something else that I didn't get done – I did not hit all my financial goals either. In addition to fixing things around the house, my wife and I had quite a few financial goals.
Things like spending less than $350 a month on food, always paying $5,000 or more on student loans, and making sure we are consistently increasing our income are some standard goals we have.
But believe it or not, we usually don;t hit any of our goals!
50% of the time we hit our student loan payoff goal and if I am being really transparent here, but we struggle to meet our $350 food budget goal some months.
However, that is the entire point of having short term financial goals. As I wrote earlier, constantly hitting your financial goals means you need to increase them. On the other hand, if you are consistently NOT hitting your goals, you may need to adjust them.
Missing financial goals is not a bad thing (At least you have short term financial goals.
Considering it is estimated that 6 in 10 don't operate on a budget, I would venture to say just having financial goals puts you in the minority.
What are short term financial goals?
Short term financial goals can be viewed as the steps or targets you set to achieve your overarching financial gameplan, for example:
- Saving more money each month to increase your net worth
- Paying off debt monthly to become debt free
- Saving to purchase a new home
- Eating out on a budget to save money for a family trip
- Paying $1,000 each month to debt, until you're debt free
The list of financial goals is truly endless,, as you will most likely always have them. Which is why it's important to know how to set them and how to be OK with not meeting them.
Assuming you miss some goals from time to time, what should you do if you miss some financial goals? Here are three tips:
1. Assess your financial goals.
Are your goals reasonable? Notice I didn't say realistic. That is a word I don't personally use because it ultimately excuses most people from really trying.
That goal is just not realistic… no point in trying
When I say reasonable goals, are your goals going to stretch you and are they appropriate?
For example, if you paid off $200 in student loans per month for the last year, maybe it is time to increase the goal. On the other hand, if you haven't paid any extra towards debt, then your goal shouldn't be to make $2,000 worth of additional payments.
Starting new goals should be gradual. Just like many people have fitness goals on January 1, they are all in, working out 10 hours a week, and by February 1 they are no longer working out.
Well, often times they were excited, but when the excitement wore off their new fitness goal was not conducive to their lifestyle and it wasn't a habit yet. A better goal would have been to work out for 60 minutes a week, then increase the goal weekly.
2.Track Spending & Goals
This week my wife and I are sitting down to discuss our budget. We are going to see where our money is going, make sure we are keeping up with our checks and balances and discuss some goals.
If you are not tracking your money, consider starting with a budget.
Already on a budget?
Then revisit it monthly to make sure you are tracking spending. With apps like Mint and Personal Capital, tracking spending and categorizing is simple.
Also, keep a simple excel sheet to track your goals. If your goal is to save more, write how much you saving down each month. Maybe you have a goal to pay off debt or student loans, write that down monthly.
At least every 2 months, check your progress. Decide if you need to readjust or implement a new plan. You can track using Mint, or alternatives.
(Me tracking our student loans payoff)
3. Reward & Encourage Yourself
Nerdwallet has a great post about how to handle missing financial goals. Long story short, one of their key points is to be your own best cheerleader.
Honestly, most people don't discuss finances with others. For many reasons, typically finances are usually between yourself, your spouse if you got one, and maybe some trusted advisors.
If you are the only one know who knows your goals, chances are others are not out there encouraging you. So you will need to be your own best cheerleader and reward yourself.
Consider having predetermined rewards along the way as you hit small milestones towards your financial goals.
For example, once you save your first $1,000 you get to go out to dinner at your favorite restaurant.
In the end, they are your goals!
At the end of the day, opinions don't pay your bills. Therefore, other people's goals are not your goals.
My biggest piece of advice is to first have financial goals, and to two, make sure they are your own.
Don't make financial goals for anyone else. If you are married or dating, create goals together that way one person is not on one sheet of music and you are on another.
The most common question I get from readers is the question about couples and differentiating opinions when it comes to finances.
My suggestion is to start by figuring out where you want to be in 10 years, and then working backward from there!
I hope you enjoyed this article and you're able o go crush your goals, but recognize that setting them high and missing is perfectly OK!
Q: What short term financial goals have you missed?
Josh writes about ways to make money, pay off debt, and improve yourself. After paying off $300,000 in student loans with his wife in less than five years, Josh started Money Life Wax and has been featured on Forbes, Business Insider, Huffington Post, and many more! In addition to being a life-long entrepreneur, Josh and his wife enjoy spending time with their newborn son, their chocolate lab named Morgan, working out, being outside, traveling, and helping others with their finances! In case you were wondering, Josh uses Personal Capital to track his net worth and his first investment account ever was an Acorns account 😎