When my son got his first real job, we sat down and talked about budgeting. About what he should do with his money. How to set goals and make plans for the future. Lucky for him, he only had one medical bill and a few monthly expenses.
But working at an entry level job is not super exciting, and your only real reason to show up everyday is to earn a paycheck. So, your motivation does not come from helping the company make a profit, it comes from setting personal goals and knowing each paycheck will get you closer to achieving them.
Even if you love the work you do and are blessed to have your dream job, there will still be days when you need another reason to keep at it, week after week.
A Goal Oriented Budget
Goal oriented budgeting is all about patience, anticipation, motivation, and accomplishment.
You Need A Dream
First, you dream big. This can be your 10-year goal; or it doesn’t have to have a time frame. Maybe just big ideas like owning a house, or living on a boat, or living off-grid in a tiny house, or being debt-free and freelancing while traveling the world.
Make it real. Think about how it would feel to do that and if it is what you really want. Do you really want to sell everything and travel the world? Or, do you just want to take a two month tour of Europe? Are you truly up to living off-grid in a tiny house, or do you just want to be less dependent on the economy and move out of the city? Do you really want to move to Hawaii, or would a few weeks there every year suffice?
Really drill down into what motivates you. Now let’s see what it will take to get there.
Focus On One Part At A Time
You may have several goals, but you need to be focused on one at a time. You might be trying to pay off several debts or saving up for several items that you want.
If you have a list of six debts to pay off, thinking about all of them and the total amount of the debts can be discouraging. Just pick one, whether it’s the smallest debt, or the most annoying or emotionally draining one.
Set up a goal tracker for just that one, like a thermometer or graph. Now, get to work on it. Every extra penny goes on it. Sell things, take extra hours at work, whatever you can do, and watch it quickly disappear. Laser focusing on one goal at a time is so much more effective and less stressful. After you celebrate that win, pick another one to go for.
If you are saving for a couch and a vacation and a new car, just pick on to focus on. It’s okay to be putting money away for all of them every month, but zero in on one to put extra effort towards.
Capture Those Windfalls
You know those unexpected windfalls? A refund, a lower electric bill, returning something you didn’t need, or a birthday gift of cash. Maybe a unexpected bonus at work. Those little unexpected amounts add up and push you even faster towards your next win. But, without a goal and a plan, you won’t even think about how to use it. You’ll just spend it randomly and it’s gone.
Make every penny work for you and your goals!
Prioritize Your Goals
Having a list of goals that are prioritized is super helpful. At the top of your list should be the goal that will make the biggest difference in life now. And it should make it easier to reach all of your other goals later.
It’s almost always easier to reach your other goals financially if you get out of debt first, but repairing your car now might mean the difference of getting to work or not in order to keep your job. When you make a list, you will start seeing the order of importance pretty clearly.
Chart Your Progress
Having a goal chart of some kind is both a motivator and a reminder of where you are headed. It could be a picture of your vacation destination or a new house you are saving for, but you should have a definite goal amount and a way to chart your progress. Use the classic thermometer, or make a fill-in graph, like a house outline with blocks to fill in every $500 saved. Anything that keeps your goal in front of you and adds motivation.
Thinking big-picture and setting goals takes some practice. You have to learn to believe that you can do the things you set out and plan to do. It just takes one step at a time in the right direction.