Up until now we’ve talked about some of the money mindset hook-ups that people have, developed a net worth statement and distinguished between needs and wants. Lots of those things aren’t fun at all, and can actually be quite depressing, but today is the day to start dreaming.
Studies show that most people have never thought about their financial goals. Even fewer have committed to writing them down on paper. However, these same studies show that people who do are more likely to carry less debt and have better saving habits. Now that you’ve got a clear picture of where your finances are, thanks to your freshly made net worth statement, that gives you a jumping off point.
Remember when you were like 8 and your elementary school teacher taught you about brainstorming? You’d write down something in big letters across the top like “Why did the chicken cross the road?” and then you’d fill up your paper with ideas? This is exactly like that.
Start with “What are my financial goals?” and go wild. Start practically – pay off my debt, pay off my mortgage, put my kids through college, have a $10,000 emergency fund, own a rental property – and then start dreaming big. I used to go to a school where the chancellor always challenged us to figure out what our BHAGs (pronounced bee-hag) were. A BHAG was a big, hairy, audacious goal. Because if you don’t have one, how will you ever achieve it? Maybe your financial BHAGs are to be a multi-millionaire or own a yacht or give a million dollars to charity or start your own business or retire at 30. Right now is the time to dream big (and hairy and audacious). Maybe you’ve always dreamed of starting your own clothing line or of traveling to every country on the planet or of taking a ride in one of those private space shuttles (seriously, check out space tourism at Virgin Galactic).
Once you’ve got all those goals written down, the next step might require some digging, because I want you to put price tags next to each one. List exactly what it will take to pay off your debt, use a nifty online calculator to figure out how much you’d need to save to put your children through college, write down how much further you have to go to build up that $10,000 emergency savings account. If you want to be a millionaire, write the numbers next to it – $1,000,000 (am I the only one who wants to put my pinky to the corner of my mouth when I hear that number in my head and then laugh?). Do a little research to see what it would cost to start your own clothing line or what a flight into outer space would cost.
Now rearrange your financial goals list in order of priorities, post it somewhere to regularly remind you of what you are saving for and get to work. Clearly, a list like this will take a lifetime to achieve, but you can’t get anywhere really without a good roadmap and now you have one.
Be sure to enter this month’s raffle for a copy of The Budget Kit by Judy Lawrence, a much wiser lady than I am. Raffle ends on October 31, 2013.
brokeGIRLrich readers, what’s your big, hairy, audacious goal? What’s your best financial achievement so far?