We all have goals in life. Most people have their goals, dreams, and desires broken down into segments of life. We have career, family, financial, personal, and other goals that drive us to a fulfilling life and Maslow’s self-actualization. But, how many goals are too many? What are your financial goals? Do you want to save for an early retirement? Do you want to put both of your children through Harvard? Do you have too many financial goals?
Everyone Needs Goals. There is nothing that drives me more batty than someone with out a dream or a goal. Everyone needs a goal to shoot for. I understand that many of us may not get to the final end where we accomplish the goal, but we need it nevertheless. Gary Vaynerchuk continues to say that he wants enough money to buy the New York Jets NFL football team. He might make it. It is definitely a stretch goal. Who knows, the team might not even be for sale by the time he gets enough money. But, he has a goal. He has a goal and a plan to give himself a shot at accomplishing his goal. And, you had better believe that he has a few short term and intermediate goals that will help him along the way to accomplish his overall goal.
Ten Is Too Many. Having too many financial goals can quickly become counterproductive. There is only so much of your personal time and attention that you can focus on any one goal or project. Many financial planners recommend limiting yourself to between three and five financial goals. One of the most famous laws in economics is the law of deminishing return. At some point, adding one more goal (in our example) will not produce equal output. So, in layman’s terms, if you only have three goals, you can probably expect to accomplish them. As you add more and more, your productivity level decreases and finally at one point, say adding goal #7, you will not see a return on your investment. It will just be too many goals and one will fall by the wayside.
Short Term & Long Term. I personally like to have both short and long term financial goals written out for me to concentrate on. I may have a big goal such as pay off $30,000 in credit card debt, but I will also have a short term goal that leads me in that directions such as going to a couselor for shopping addiction or paying off my smallest credit card in my debt snow ball. I’m also a big fan of intermediate goals too. So, think big and think small when you set them.
Need To Prioritize. There are so many competing requirements for your dollar bills. There has never been such a fight over such a finite resource. Now, we must contend with children needing our help longer into adulthood and our parents also needding our help in their twilight years. How do you choose which goals to finance? That is a very personal decision and one that cannot be made lightly. You have to consider what is most important to you. For my wife and I, our number one priority after college was getting out of credit card debt. All of our other goals fell by the wayside until that was accomplished. After paying off the debt, we were able to focus and readjust our financial goals. Now, our goals fall in line with our retirement dreams of saving for an early retirement, buying a rental house, and saving for our children’s college educations.
Write Your Goals Down. You need to have your goals written down so you can physically see them. Writing them down makes them official, and it keeps you honost with yourself. I love to post my long term goals on the refridgerator in the kitchen and the short term goals on my bathroom mirror. It keeps me motiviated.
Reevaluate Often. One of the beauties of goals is that if you strive hard enough at them and dedicate your time and resources to them, then you usually accomplish them. Goal accomplishment lends itself straight back into the loop with goal creation again. You should never “not” have a goal. I need to be heading towards somehting. I need to continue moving the ball down the field towards some type of goal line. So, as soon as I finish one goal, I set another.
Goals are important to your financial success. Smart goals are even more important to accomplishing them. Too many goals will not help you succeed. You need specific, reachable, quantifible, and actionable goals that meet your needs. With the right goals in your life, you can accomplish more than you ever dreamt possible.