Steps On How To Set A Reasonable Timeframe For Financial Goals
Many of us have come face-to-face with debts before, and this encounter is often a stressful experience. Perhaps as a learning from this, we now set ambitious financial goals with rigid timelines. Save X amount by this date; buy a property in Y years. This way, if ever we meet “debt” again, we will be ready.
Still, Rome was not built in one day, or so the old adage says. Likewise, attaining your financial goals does not happen overnight. Often, you may need to invest a lot of time, effort, and well-made decisions in order to do so.
Step 1: Embrace the “Goldilocks Zone” of Goal-Setting
In fables, a young girl named Goldilocks samples three different bowls of porridge and discovers that she prefers the one with a temperature that is neither too hot nor too cold, but rather just right. Born from this tale is the Goldilocks principle, which you can use when setting time frames for your financial goals.
If your plan is too short, say 1-2 years, you may find yourself feeling frustrated if you do not see immediate results. This is especially true if you had just recovered from debts. Still, if you stretch it too long, it is likely that you lose motivation along the way. The key is finding that sweet spot that is challenging yet achievable.
Step 2: Reverse-Engineer Your Future
We are all too familiar with time travel. We have seen it portrayed in movies, television, and books. What if you use this concept in finances? Instead of starting from where you are now and projecting forward, try imagining your ideal financial situation in the future and working backwards.
Picture yourself in 10, 20, or even 30 years. What does your life look like? Are you sipping cocktails on a beach in Bali? Running a successful business? Once you have that vision, start breaking it down into smaller milestones. This reverse engineering approach can help you set more meaningful and motivating timeframes.
Step 3: The “Financial Fitness” Approach
Think of your financial goals like getting in shape. You would not expect to go from couch potato to marathon runner overnight, right? The same goes for your finances. Start with smaller, more achievable goals to build your “financial fitness,” then gradually increase the challenge.
For example, if your ultimate goal is to save $100,000 for a down payment on a house, start with saving $1,000 in three months. Once you have achieved that, aim for $5,000 in six months, and so on. This progressive approach helps build momentum and confidence.
Step 4: Implement the “Financial Goal Sandwich”
No, we are not talking about a sandwich made of dollar bills (although that would be interesting). The “Financial Goal Sandwich” is about layering short-term, medium-term, and long-term goals.
Short-term goals (1-2 years) are your immediate financial priorities; medium-term goals (3-5 years) bridge the gap between your current situation and long-term aspirations; and long-term goals (5+ years) are your big, life-changing financial dreams. By working on all three simultaneously, you maintain motivation through quick wins while still progressing towards your bigger dreams.
Step 5: The “Financial Goal Roulette
Spice things up by adding an element of chance to your goal-setting. Write down several financial goals on pieces of paper, fold them up, and put them in a jar. Every few months, pull one out at random and focus intensely on that goal for the next quarter.
This approach keeps things exciting and prevents you from neglecting certain aspects of your financial life. Plus, it is a great way to challenge yourself and discover new financial strengths.
Step 6: Embrace the “Rubber Band” Mentality
Financial goals should have some stretch to them, like a rubber band. They should pull you forward, but not to the point of snapping. If you find yourself constantly falling short or overshooting your goals, it is time to reassess and adjust.
Remember, it is okay to change your timeframes. Life happens, priorities shift, and that is perfectly normal. The key is to stay flexible while keeping your eyes on the prize. If you ever need to borrow from a licensed loan company, just make sure you can handle it responsibly.
Step 7: Create a “Financial Vision Board”
Who says vision boards are just for life coaches? Create a visual representation of your financial goals and their timeframes. This could be a physical board in your home or a digital one on your phone or computer.
Include images that represent your goals, key milestone dates, and motivational quotes. Having a visual reminder can help keep you focused and motivated, especially during those times when your goals feel far away.
Wrapping It Up
Setting reasonable timeframes for your financial goals does not have to be a dry, by-the-numbers exercise. By thinking outside the box and adding a dash of creativity to your approach, you can make the process more engaging and ultimately more successful.
Whether you are in Singapore, Sydney, or San Francisco, the principles of smart goal-setting remain the same. It is all about finding an approach that resonates with you and keeps you motivated on your financial journey.