Why should you be interested in goal setting? Because without a target, you'll hit it every time.
Or as hockey professional Wayne Gretzky said, "You miss 100% of the shots you don't take."(1)
Does the exercise involve more than just making New Year's resolutions? Yes.
Many people make resolutions they either have no intention of keeping or they know they will start -- and quit!
We encourage you through the information on this page to work systematically to achieve your goals.
If you're truly looking to make a difference in your life in some area, you can change things if you are determined to do so.
Goal setting will help you.
If you read about us, you will know that after we amassed a sizeable amount of credit card debt, we determined to pay it off, and the Lord provided what we needed to do so.
First, understand that there are short-term and long-term goals.
We view the achievement of long-term goals as the successful achievement of a series of short-term goals.
It's kind of like getting to the top of the ladder by climbing up one step at a time.
Second, you may choose to have a number of goals, such as in different areas of your life.
In the past, when we have made our lists of what we want to accomplish each year, we have broken them down into the following categories:
Of course, you are free to select the categories that interest you.
Some folks like to set broad goals, such as to:
Each of these broad areas touches on finances to a certain degree, even if it is only the use of your time that you could be using earning money.
Some have direct costs, others indirect costs.
However, trying to achieve these as-is is like asking someone to go from the bottom of the ladder to the top without climbing up the rungs!
Consider what is being conveyed in the image at left that shows getting from Point A to Point B in 4 big steps vs. 12 smaller ones.
It's like trying to tackle a project quarterly vs. monthly.
Another aspect of this difference is that with a greater number of small steps, you have more opportunities to celebrate successes and perhaps encourage forward movement.
This can be important to some team members (such as family members).
One website on goal setting encourages readers to make goals according to the "SMART" model, as follows:
We're taking the liberty of adding these three additional measures:
We say this on our budgeting page:
Just as in driving a truck and delivering freight, there are four crucial parts of the budgeting process:
- knowing where you have been (previous loads and customers, history, good and bad experiences);
- knowing where you are (shipper);
- knowing where you are going (consignee or receiver); and
- knowing how you will get there (route and responsibilities).
If you need to, review that page for an in-depth look at each part of the budgeting process.
Let's apply the SMART WAY goal setting model for the potential goal of "becoming debt-free."
Setting some arbitrary numbers as an example, suppose a truck driver
Each payday (and every day between paydays), our goal-setting trucker might be tempted to spend money that could go toward paying off the debt on products and services he doesn't need, can do without, or can substitute something less expensive.
Saying "no" to the things that can sidetrack him is actually a way of saying "yes" to fulfilling the goal of being debt-free.
One of the things that we like to do as a husband and wife is to go out to eat in restaurants.
Even though both of us like to cook (and like to eat our own cooking), we would feel like we were on a deprivation diet if we completely eliminated restaurant meals from our practice and budget.
Yes, we could save money, but we would feel like prisoners to our goals.
There should be some flexibility in everyone's goals.
In the case of the driver who needs to pay off his debt, perhaps one month he is able to put only $800 toward the debt instead of the $1,000 that he wanted to put toward it.
Instead of beating himself up over not meeting his goal one month, he should just keep the goal in front of him and see if he can put maybe $1,100 toward the debt for the next two months.
If not, then maybe he can pay the remaining $200 in the 13th month.
(Please note that pushing a payment of $200 into the 13th month will only work if this is a personal goal and not an actual loan or obligation you're legally paying off. If you're late with payments on loans of any kind, that strategy can backfire!)
Of course, your situation may be vastly different from this scenario, but we think you get the idea.
Realize that different people have different goals or targets. Your goals won't necessarily be the same as anyone else's.
Once you have a good goal, aim toward it and try not to get distracted.
If you hit your goal, great!
If someone else hits his or her goal and you didn't hit yours, don't get discouraged.
Refocus on your target and keep trying!
At the end of the time period that you set for yourself, examine how well you did.
If you wanted to get closer to your goal, determine how you will do that.
Ask yourself questions like these:
By the way, don't be afraid to ask for help if you need it.
For example, if you need to see a financial advisor or consumer credit counselor to help you learn how to manage your money, by all means, go see one.
In our particular case, we sought help from our spiritual higher power, the Lord. He is always pleased to help His children achieve goals that are in keeping with His overall plan for the ages.
Also, there are tools available to help you understand some things about yourself and your patterns/habits.
One such tool is our special file entitled "My Spending Diary," which can help you understand where you're spending your money and why. From there, you can make adjustments to reach your goals.
Let's go back to the scenario of the driver looking to get out of debt.
To assist folks like him who are interested in goal setting, we propose this slogan: "Will This Help Me Meet My Goals?"
You may ask this question regarding just about any action that affects the goals you have set.
Granted, there may be times when you have to forego meeting a goal because of a more urgent need.
We'll be the first to admit that sometimes goals can be delayed by accidents, emergencies and changes in circumstances.
Flexibility can keep you from feeling like you're a prisoner to your goals.
Remember, the goals are there to serve you, not you to serve the goals.
For example, we did not know at the beginning of 2009 that Vicki would be riding with Mike full time later in the year and that we would make the choice to give up our home, becoming homeless.
Our at-that-time situation enabled us to save money on housing and two sets of utilities.
It wasn't a complete savings because we still had to pay to wash and dry our clothes in a public laundromat.
And we had other expenses we wouldn't have ordinarily had, like a mailbox rental.
Still, we were able to keep up with what we're spending to see if it balanced out in favor of the adjusted goals we set.
The question "Will This Help Me Meet My Goals?" is different from "Will This Save Me Money?" because not every purchase will be a direct savings of money.
Vicki tells the true account of the time when she worked in the chemical industry. She did a lot of standing on her feet at the lab bench and "invested" in a pair of shoes at a shoe store that was famous for selling less expensive brands.
By the end of one year, the shoes were worn out. She replaced them with an identical pair. By the end of the second year, the second pair was worn out. She replaced them with yet another identical pair.
When the third pair was worn out by the end of the third year, she finally got smart.
She invested in a better quality, more expensive shoe that ended up lasting 3 years.
The fourth pair was a better value than the first three pairs.
By lasting longer, it was better investment in the long-term even though it did not save her money up front.
In the same manner, that is why we have issued such a strong warning about our experience with the Pot-n-Pop hot pot on our website.
Although it seemed that we would be able to save money by using this 12-volt appliance by cooking in our trucks, the appliance was so cheaply made that it stopped working within a short period of time.
In other words, it was a poor investment. We have spoken out because we don't want for you to be stung financially!
Your experience might be able to help someone else.
Every year for the last four years that Mike taught middle school, he had to have "the talk" with his students about mediocrity versus excellence.
There was always a mid-year slump where a large percentage of the students just seemed to slack off in their work.
Since you're an adult, we're sure that all we need to do is encourage you to approach your goal setting with excellence and determination.
In case you need inspiration, Lynnae of BeingFrugal.net posted her Frugal New Year's Goals.
For your benefit, we have provided free downloads for setting goals in any year:
We also referred to on our To-Do List page:
Get all of these goal setting sheets and checklists through our Free Downloads page.
Money saving tip: One of the benefits of being debt-free is that you are free to pursue allowing your money to work for you.
Supposedly, Albert Einstein was quoted as saying, "The most powerful force in the universe is compound interest."
If you choose to take your savings and invest them in a compound interest bearing account, it is amazing what you can amass over time.
If you Google the phrase "compound interest calculator" you can find a suitable device to help you in your goal setting.
Let your long-term goals be at least part of your motivation for what you want to accomplish.
When we did, we had a dream come true.
1. http://thinkexist.com/quotes/wayne_gretzky/ (no longer online)