Today’s Financial Message Just for you, {{ first name | friend}}
Setting financial goals sounds productive until you realize "become a millionaire by 40" wasn't realistic when you were already 38 and broke.
The problem isn't that we don't set goals - it's that we set goals like we're writing fiction instead of looking at our actual bank statements.
Start with something achievable:
save $1,000 for emergencies
pay off one credit card
contribute enough to get the full 401k match… Continue Reading
This week, I stumbled across a survey by the CFP Board of Standards titled, Lessons Learned: A Survey of American Gen Xers.
They made their intent crystal clear on Page 2: Do not make the same mistakes we did.
The survey results thus outlined many of the financial regrets we Gen Xers carry - and want to pass on to those who come after us. (Not that they’ll listen to us.)
Achieving Life Goals Before 60?
One of the first results shows that 43% of American Gen Xers claimed they’d successfully reached their overall personal life goals, but only 37% had reached their financial goals.
While my first cynical thought was, “Wow, who achieves their life goals before 60…?” but kept reading and it made sense. These are folks aged 45-60, so of course the personal achievement goals and successes were centered around family, home and career…
Becoming homeowners - 71%
Raising a family - 78%
Earning an education - 68%
Caring for aging loved ones - 68%
Realizing career aspirations - 49%
Which is great…but what about those lessons learned?
More than 9 in 10 regret having delayed making financial plans for significant life events.
Most of us grew up with similar life dreams and goals - have a great place to live, a job we like and be around people we love. We were raised on that as much as we were on Sesame Street and Kool Aid.
What we didn’t get a steady diet of was how to plan to pay for all of that - and everything else life threw at us.
But it’s never too late! Setting a few strategic financial goals can make up for much lost time, if you’re among the 63% who have NOT reached their goals.
Financial Goal #1. Eliminating debt.
Eliminating all debt is the goal here.
The reason is simple: debt accrues interest which creates an increasingly large drain on your life. Until your debt is eliminated, all other financial goals will be significantly harder to achieve.
Financial Goal #2. Ending Financially Draining Addictions
This isn’t a long-term financial goal in itself, but it is a necessary financial step to achieve your other goals.
Addictions to anything too costly function as parasites eating the money in your bank accounts. It’s better to follow models like the 50/30/20 rule to make sure more money is being saved or at least spent on necessities.
Common habits and addictions that bog down personal finances include:
Hoarding (also requires more space to sustain)
Shopping for expensive products (brand-name items are great, but only when they don’t cut into more important expenses)
Unnecessary and over-eating
Substance addictions such as smoking (negative health impacts can incur even more future expenses)
Financial Goal #3. Living Within Realistic Means.
Learning how to live within a way that is appropriate for your budget and income is a skill.
It can be a hard thing to start doing, but it is necessary if you want to plan a better financial future. The main purpose of this step is to make it easier to start saving and investing.
Financial Goal #4. Protecting Your Family’s Future.
For most people, this means estate planning and perhaps creating an inheritance fund.
What is right for others may not be right for you; everyone has a different family situation and thus different estate planning needs.
Read the whole article, and all 10 Financial Goals👇
Go Deeper
Explore the topic of financial goals with a few more Wealthy Thinker articles:
Now you know where your money goes.
“I Don’t Even Know Where to Get Started.”
Ready for a reset? Start with setting up a classic budget. 50% goes to Essentials, 30% to Wants and 20% to Savings.
Yes, there is a right way to make financial goals.
“I Can Set Goals, But I Never Seem to Stick to Them.”
Maybe you’re missing something. Make them Specific, Measurable, Achievable, Realistic and Timely.
“I’m picturing a villa in Portugal…”
“Looking at a Spreadsheet Doesn’t Inspire Me .”
Fair enough. Have you tried building a vision board? Seeing pics of your dream life can help you hit your goals faster and stay on track.
Money Mindset Message
Jules (Demi Moore) spent every paycheck on partying and the pinkest apartment you’ve ever seen. (St. Elmo’s Fire, 1985)
Fun? I guess??
Do you remember your first job? It was probably something like most of did, and was in fast food, or stocking shelves in a grocery store for minimum wage.
What did you think of today's newsletter?
*overdraft fees source: https://finhealthnetwork.org/research/overdraft-nsf-fees-bigger-burden-than-previously-estimated/