One of the most basic pieces of personal finance advice is to set goals. However, setting goals for your money should be more than just a basic exercise in creating a laundry list of tasks.
If you want a better chance of achieving your money objectives, you need to know how to set meaningful goals.
Why You Should Set Meaningful Goals
One of the best things you can do for your money is to make it a point to set meaningful goals. You have to go beyond just listing out things that you’d like to do with your money. Instead, you need to think about what would make a difference in your life.
When all you have is a list, you’re less likely to stick with the goal. On the other hand, if there’s a meaning behind the goal, you’re far more likely to sacrifice to achieve the objective. On top of that, when the going gets tough, you’re more likely to find a way to keep going.
Think of all the resolutions you’ve not fulfilled. Chances are, you didn’t feel that those goals had a specific meaning for your life and your purpose. They were abandoned.
Steps to Setting Meaningful Money Goals
When you’re ready to set meaningful goals for your money, here are the steps you can follow to make it happen:
1. Identify your values
Start by figuring out what you value most. Rather than just listing out some random money goals that you’re “supposed” to have, think about what matters to you. When you can identify your values, you have an idea of what’s really important.
What’s important to you will be different than what’s important to others, and that’s ok. The main idea is to figure out what you value so that you can take steps to make it a reality. Meaningful goal setting is about knowing your values.
2. Decide what steps you need to take to live according to your values
Next, figure out what steps you need to take if you’re going to live according to your values, or spend your money according to your values. Whether they’re short-term goals or long-term, you can figure out those steps.
If you value education, you need to decide which steps are necessary to save up enough to pay for your child’s college, whether that includes setting aside money in a 529 or reducing your expenses in other areas of your life.
Whatever those values are, whether it’s becoming debt-free or traveling more, you can take steps to move toward those values with your money. Take a look at how you could be using your money differently and then identify the steps you need to take in order to bring your money choices in line with your values.
3. Set goals that help you take those steps
As you move forward, set meaningful goals that help you take the steps you’ve identified. If you know you need to save more money for college, you can set a goal to save the appropriate amount each week, and then set another goal to increase what you’re setting aside after you’ve paid off debt.
Your goals should help you move closer toward achieving the lifestyle you want and doing the things that matter most to you.
4. Keep your “why” in mind
Finally, as you go through the process, don’t forget your “why.” Part of setting meaningful goals is understanding why you want to accomplish the goal. As you set your money goals, be sure to list a “why” next to the goal.
That way, if you feel tempted to stray from your goal, or if you’re feeling a lack of motivation, you can return to that “why” and remember the point of the exercise. One of the best reasons to set meaningful goals for your money is the fact that you can return to the ideas that make it worth doing and use that for inspiration to keep going.
Tips for Better Money Goal Setting
As you work to achieve your money goals, there are a few things you can do to increase your chances of success and get more from your efforts:
- Write your goals down: Be sure to write down the goal — and include the “why” as part of the statement next to the goal.
- Break them down into chunks: Rather than getting overwhelmed by the end result, break out each goal into smaller, achievable chunks.
- Have a way to measure progress: Know what constitutes success, and have a way to measure your progress so that you can celebrate the wins and know how far you’ve come.
- Reward yourself: Be sure to have a small reward at each milestone to help you stay motivated.
The more mindful you are about setting goals, the more likely you’ll be to find success with your money.