On this episode of How To Money, Matt and Joel talk about financial goals. Many of us have vague goals like “saving more,” but to really begin saving and spending our money wisely, it’s important to take some time to think about what our goals really are, and how money can help us get there. Money isn’t the be-all end-all of happiness by any means, the guys say, but it can help us achieve the kind of life we want. So they dig a little into the psychology of spending, and outline their SMARTER method of designing financial goals for themselves and their families for us to try as well, so we can be sure our saving and spending behaviors are helping get us where we want to go. “Put your money where your goals are,” Joel says, “and keep those goals in sight.”
Figuring out financial goals requires a little introspection; “so much of money goals comes from knowing yourself,” Matt says. For example, one listener told them that she was willing to sell her car before she would give up her six chickens. And if you dig deeper into that decision, Joel says, you’ll probably see that it had more to do with what the chickens represented than the chickens themselves: “Self-sustainability, the pace of her life, connection to the earth.” Knowing that big “why,” that big goal, of her life helps her direct her behavior to achieve that goal. So it’s important for all of us to find that “why” for ourselves, too.
After that, it’s about creating SMART goals. The acronym stands for Specific, Measurable, Attainable, Relevant, and Timely. As an example, instead of saying, “I’ll save more this year,” get specific: “I’ll save $50,000 for a down payment on a house.” The amount, and the specific goal for the amount, gives the goal more purpose, and you more motivation to reach it. But measure the goal, too: “I’ll save $50,000 for a down payment on a house in the next four years.” Is that goal attainable, based on your income and expenses? It’s very easy to ditch goals because they’re too pie-in-the-sky, so be realistic. And is that goal relevant to giving you the life you want to live? Timely means breaking that goal into manageable chunks, so you don’t lose motivation along the way. But maybe the most important is the -ER that Matt and Joel add to SMART: Evaluate and Reevaluate. Our financial goals change as we grow and change, so it’s important to keep assessing these big goals to make sure you’re on the right track. Hear all this great information to get your money goals rolling on this episode of How To Money.
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