Setting Realistic Financial Goals
Each person and family (and business!) has a different financial situation. I’ve certainly seen my share of financial ups and downs over the years. Thankfully, we’re in a good spot financially, and headed towards an even better spot because of our meticulous planning. However, last year was a bad year for us. A really, really bad year. We were so lucky to have savings to fall back on because without it we would have been in real trouble. 2017 could have ruined us, if we hadn’t planned for emergencies by setting financial goals that allowed us to have a significant amount in emergency funds and savings.
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2017 summed up:
- Our Jeep broke twice and both times it cost in excess of $1000 to fix
- We got bedbugs and the exterminator bill was $600, plus our water and electric bills were doubled from all the washing/drying, steam cleaning, etc.
- In the middle of the bedbug fiasco, our water heater died. It had to be replaced and moved away from a wall in our basement too. That was $4000.
- Right after we got done with all the washing and drying from bedbugs, the washing machine crapped out on us. Repairs were $400.
- Chris had to have emergency surgery to have his gallbladder out and that bill was thousands of dollars both from the ER and then the surgery.
- We had a death in the family and we all needed clothes and we needed to order a couple hundred dollars in flowers.
So 2018 is a year of rebuilding for us. Our financial goals start with rebuilding our emergency fund and our savings. Ours is pretty straight forward and simple this year, but it hasn’t always been this way. We’re real people and we’ve struggled with money in our past. Just because you’re struggling NOW, doesn’t mean you always will be. The one way to protect yourself from struggle is to SET REALISTIC FINANCIAL GOALS. A savings account can give you that little bit of wiggle room to just breathe….it can be suffocating living paycheck to paycheck and not knowing how you’d pay for some large emergency. Here are a few easy steps to take control and work towards small goals.
- Know where your money is going. Look at your checking account and write down what you’re spending for different things. Groceries, gas, mortgage/rent, utilities, vehicle loans, credit cards, student loans, insurance, etc. Compare those amounts to what you have coming in every month.
- Analyze where you might be wasting money. Eat fast food everyday? You could bring food from home and save a few bucks every single day. Stop for a coffee a couple times per week? You could bring it from home and save the money. Paying high interest on those credit cards? Wasted money. Buying food that doesn’t get eaten and thrown away? Money in the garbage can. Paying sky-high insurance rates? You might be wasting your hard-earned cash.
- Formulate a plan to eliminate that waste. Plan your lunches for work or take leftovers. Buy a reusable coffee cup and take coffee from home. Call your credit companies and ask for a lower interest rate. Make it a point to eat food in the fridge before it goes bad, or freeze it before it goes bad. Call for updated insurance quotes on your home, renters, and car insurance.
- Set a small, reasonable goal for savings. If you have no savings, then that goal might be $100. If you’re really strapped for money you might have to put away only $10 per paycheck. What’s important is that you’re working towards your goal no matter how small of baby steps you’re taking. You WILL reach your goal if you continue working towards it like that!
- Keep setting small goals to reach your bigger goals. Even if your first goal was $100 then your second goal should be $200. Work your way towards having $1000 in your savings. A thousand dollars in the bank is going to pay for MOST things that come up in life unexpectedly. For us, we made that our goal because that would cover an insurance deductible if we had a tornado or car accident or something.
- Set your biggest goals. What are some reasonable things you want to have in your life? Maybe you want to buy a home, or a car, or a cabin on a lake. Maybe you want to have a million dollars in the bank by the time you retire. Maybe you want to travel or buy a year’s worth of food. Maybe you want to pay your house off and buy a boat. WHATEVER your big financial goals are, write them down. Focus on how to get to them because it’s easy to lose focus for all of us. Sometimes I want to buy a new wardrobe or a new pair of obscenely expensive shoes, but my big goals stop me from being wasteful.
- Keep some cash on you for ‘just in case’ moments. It doesn’t have to be a lot of money, and I don’t suggest carrying around much cash, honestly. However, it’s never a bad idea for keep a couple tens, fives and ones in your wallet. I’ve had my bank card not work before, and it’s terrifying to be “cut off” from all of your money. Even just a few dollars in cash could get you enough gas to get home if the need arose!
Just remember to set reasonable goals. Don’t get too ahead of yourself. If you’re only making $18,000 per year you’re not going to be able to save a million dollars by next year unless you also win the lottery. You CAN save $200 if you’re willing to pinch pennies and make saving a priority though.
Put those tax refund checks in savings! It can be a huge boost to get you going in the right direction. Get yourself one thing you’ve wanted all year and put the rest away. Invest that money in YOU and your sanity by putting it away for a rainy day. It’s worth it, I promise you!
And if you’re broke, I mean REALLY broke: I’ve been there too. You’re not alone. There are going to be better days ahead. Just hold on, just keep going, just keep working hard and knowing that you’re worth the struggle. Keep putting one foot in front of the other. Keep your eyes, ears and heart wide open for better opportunities and you WILL find them. And if you’re reading this, you can set realistic financial goals too. Grab an old jar or pop bottle or whatever you have laying around. Make it your goal to fill that up with change. This is about starting somewhere, and “somewhere” doesn’t have to be big and grand and it doesn’t even have to involve a bank. You could make your first goal to save enough money for a tank of gas or a weeks worth of groceries.