5 steps to achieve your financial goals in 2018

January 12th, 2018 by Anchor Bay Capital's Investment Team

We are almost two weeks in to 2018 and as we maintain this month’s theme of Financial Organization, I think it’s the perfect time to discuss how to accomplish your financial goals for this year.  Here are 5 things that you can do right now to get organized and make sure you are working toward your goals.

Step 1: Get rid of your critical or negative voice

Do your best to turn it off for this process.  So much of our approach to our finances is learned from our environment.  You may handle your money a certain way because of your parent’s attitudes while growing up or an early experience with money.  It is important to understand how you have developed your mindset toward your finances, but it is even more important to let go of the past.  Your goals should be measured from today looking forward.  Don’t let your critical voice prevent you from getting started.  You can learn whatever you need to learn to master your money and accomplish your goals.

Step 2: Get clear on what you want

When I played sports in college, I was taught a visualization technique that I have always remembered. The night before the game, I would take my playbook and look at each play.  I would close my eyes and visualize myself in the game running the play.  I loved doing this!  So many times I would find myself in the game playing out of muscle memory because I had visualized the event before.  I apply the same technique to most things in life.  With your money, you can’t really accomplish anything if you don’t know what you want and why it matters to you.  So the first step is to take the time to get some clarity.  This needs to be your process.  It may be a reflection on your past finances or a conversation with your spouse about the future.  For some it may be a quiet meditation and for others it is just some time alone at your desk or a coffee shop.  Whatever your process, this is your time to visualize what you want with your money.

Step 3: Write it down

If you have a vision for what you want to accomplish, is this really a goal?  You may have a hope or a dream or something that you really want to happen but how do you take action to make sure you have some control over your future?  I recommend that your goals meet this criteria:

  • They need to be achievable
  • They need to be measurable
  • They need to be written down

Using these three tests will make sure that you are working toward a goal and you are not just relying on some luck for your vision to take place.

Step 4: Break it down

This is the actual work of the three tests that I mentioned above.  You have to break down how your goals will actually fit in your finances.  Working with a financial planner comes in handy on this step, but if you prefer to do it yourself, you need to gain an understanding of how your goal can be broken down into smaller parts.  How does your annual goal break down into monthly dollar amounts?  What will you measure on a weekly or monthly basis?  Start by writing down the annual goal.  Then write down the monthly break down of what you will need to do.  Finally, write down the dates that you will measure your progress so that you have some accountability.

Step 5: Stop Procrastinating

Too many times, I see a lack of progress on financial goals blamed on willpower.  In my mind, lack of willpower is really just not having a plan of action that you can buy into.  In order to avoid procrastination, write down two action item lists for each goal.  The first list should be actions you need to start and the second should be actions you need to stop.  By writing these down and reviewing them with your goal each month, you should have the reminders you need to stay on track.

Putting it all together should look like this example:

Annual Goal: Pay off $5,000 credit card
Completion Date: November 2018
Monthly Tracking: Pay $478 each month toward card
Monthly Reminders: Review balance with my _______ for accountability on the 10th of each month and make my payment.

What to start:

  • Load credit card balance in my online financial portal for tracking
  • Set up automatic payment of $460 on the 10th of each month
  • Set up a budget for excess spending each month after I pay my card

What to stop:

  • Remove this card from my wallet so I don’t add to the balance
  • Stop stressing about this situation. I am making progress

Bonus Step: Celebrate your success

Take time to reward yourself for making progress.  Make a deal with yourself or someone that you want accountability from and set up a reward.  I have seen people set up money dates with their spouse each month.  This is a time to talk about finances, but also celebrate success.  Treat yo’ self.  Just remember, if you set up your goals and write a plan, you are way ahead of the curve!  According to studies, 2/3 of people have financial goals, but only 1/4 of people have a written financial plan*.  Write down your plan and celebrate that you are making things happen!

If you don’t have an online tracking system for your finances, check with us.  We can set you up so that you are organized and moving forward!