Have you set your compass?
When I meet with clients for the first time, one of the questions I ask is “What are your life goals?” It seems like a simple question, and yet most people do not have a clear answer for me. In fact, they kind of look like this after I ask them.
One time I had a client say, “My current financial advisor never asked me that question.” And I was not surprised to hear it, but I was shocked that it was not something he focused on. After all, what’s the point of working, saving money, investing money, spending money, if we don’t know why we are doing it?
Without direction, we get lost
Our financial goals are like the compass in our lives that point us in the right direction. Without having goals in place, we will literally wander financially and the entire time you are wandering, you are wasting time and energy you could be exerting toward achieving your goals.
I am a big believer in the SMART goal system, but I am a blonde and can’t always remember what all the letters stand for, so I shorten it to SAM goals. I tell my clients that their goals should be Specific, Attainable and Measurable. When we put these criteria on their goals, all of the sudden, everything starts falling into place.
Wander Goals vs. Compass Goals
When people have generic goals in place like “saving money” and “spending less”, I tell them they have “wander goals” that are just leading them all over the place, but not taking them anywhere specific. When they put SAM goals in place, they have “compass goals” that are actually going to lead them somewhere specific. Here are some examples of wander goals and compass goals.
Wander – I want to save more money.
Compass – I want to save $600 dollars by the end of the year.
Wander – I want to buy a house.
Compass – I want to buy a $200,000 home in five years.
Wander – I want to retire.
Compass – I want to retire by 70 and have $1,000,000 in my retirement account by then.
Wander – I want quit my job.
Compass – I want to leave my job in the next 3 years to work in the non-profit sector and want to have $10,000 in my emergency savings account before I do.
My Compass Goal
For me, one of my compass goals this year was to save $1,000 by June so that I could attend Fincon. For those of you who don’t know, Fincon is a personal finance blogger convention. I determined that I would achieve this through my side hustling that I have written about and as of last week, I made my goal, and I am all booked and ready to go! Having a specific goal like this gave me focus on my side hustling and pushed me to work harder to achieve it.
The more specific and measurable you can get with your goals, the easier it is to determine if they are attainable and what it will take from you to achieve them. It’s not just enough, though, to set your compass, you also need to create and follow the roadmap that is going to get you there. On Wednesday, I will share the roadmap for your journey.
Gif source: GIPHY