It’s no secret that the key to finding financial peace, is in actively managing your money. But let’s get real – it’s hard to do.
And many of my readers struggle with this very thing – just how the heck do you even get started managing your money?
Well, it first starts with clearly defining your goals. I’m not just talking about financial goals, I’m talking about defining your life’s goals.
You may be surprised that I didn’t say “budgeting” as the first step. That’s because without defining our end point, we have no idea what we really want our money to help us achieve.
That’s why we have to define our goals first – so we know just where the heck we want to end up.
Where do you want to be in 5 years from now?
Take a moment and answer these questions. Regardless of how silly you may feel doing so, answering these questions will help you get clear on what you want your future life to look like.
What year will it be?
What will life look like?
How old will you be?
How old will your spouse and children be?
How long will you have been married for?
What is one thing you want to have accomplished?
As crazy as it may seem to ask yourself these questions, it’s imperative because it actually puts you in that place in time. Let’s look at this through one of my readers Angela (I’ve changed her named in order to protect her privacy).
Angela has always dreamed of sending her kids off to college debt-free. She wanted to allow her children to not have to worry over taking out student loans. Obviously she knew that they would need to apply for scholarships and things but she wanted to have money saved and prepared to help pay for anything that the scholarships wouldn’t pay for.
She went through this goals exercise and realized that in 5 years from now…
She would be 50 years old and her children would be 17, 15, and 9 years old. She also realized that she had exactly $1,000 saved up for college and at her current rate, she was not going to have enough money saved in time for her oldest to go to college debt-free.
“I would have never realized that we weren’t saving enough for our children or for our own retirement if I hadn’t walked through this goal-setting exercise. 5 years seems so far off in the future until you put real numbers to it and you start to realize that, ‘oh my goodness, in 5 years I’ll only be 15 years from retiring and my oldest child will be heading off to college in a year.’ It’s easy to look at my 12 year old and think, ‘oh I’ve got time to save’ but it’s another to realize that it’s not that far off in the future that he’s going to be going to college and that we don’t have enough saved. It was an eye-opener for us.“
Angela and her husband made some crazy decisions in order to put themselves back on track with achieving their goals. They sold off their house and moved into a much smaller (and older) house, using the equity they had built into their old home as a huge down payment on their new home.
This freed up a tremendous amount of money in their budget to start applying it towards their children’s ESA funds and their own retirement funds. It also made it possible for them set themselves on track to payoff their new home much faster than they would have paid off their old home.
Are they perfect with money? Nope. No one is.
Are they perfectly set with their savings goals?
No, but they are a whole lot closer to achieving those goals than they were 6 months ago. They’ve now increased that $1,000 to $5,000 and are steadily working towards increasing it. Not to mention, that they are actually saving money for retirement now.
Sometimes we get so caught up in the daily grind that we lose sight of the bigger picture– of the goals and dreams that we have.
[clickToTweet tweet=”Sometimes we get so caught up in the daily grind that we lose sight of the bigger picture. @jessifearon” quote=”Sometimes we get so caught up in the daily grind that we lose sight of the bigger picture. @jessifearon”]
The thing is, when it comes to setting goals it’s not just about the goals that you set, but about the choices that you make today in order to finally achieve those goals later on.
We must clearly define our end point, in order to know where we are going – that’s all that goal-setting is. So once you’ve dreamed up and pictured your life 5 years from, start taking action today in order to start journeying towards achieving those future goals.
I hope today is treating you well and I would LOVE to hear what your goals are for the future! So please comment below and let me know – in 5 years from now, what do you want to have accomplished?
P.S. Do you follow my monthly goal update posts? You can check out the latest one here.
Other posts you may enjoy:
JOIN THE CHALLENGE!
Money controlling you? I know the feeling. My family has been living this real life on a budget for a long time and I can tell you that there's never a perfect season, but with a few changes you can start to reign in your money issues.
Join the 5-Day Challenge today and start getting your money life in order this week!