This goal setting activity will allow you to write down your goals, perhaps for the very first time. To complete this activity, you will need eight to 12 index cards.
Start by writing your dreams on these index cards. Your dreams now have become your goals. Don’t leave anything out; this is your “wish list.” Make your dreams specific and put down a year. If a financial cost is involved, estimate what that will be. Examples might be:
Goal | Time Frame | Cost |
---|
Retirement home in Arizona | 20 years | $100,000 |
Graduate school | 4 years | $30,000 |
Used pontoon and lift | 2 years | $10,000 |
Trip to Australia for two | 5 years | $5,000 |
Now sort your cards into two stacks: goals you want to accomplish within the next five years and goals that will take longer than five years. Now sort your cards in each stack in order of priority.
On the back of each card, write what you would need to do to make that dream a reality. Also write down money you have saved already for that goal (if any) and other expected sources of money that may help you achieve your goal.
For example, if one dream is a trip to Australia for two in five years at an approximate cost of $5,000, you might write “save $1,000 a year for five years.” In this example, the couple already have saved $1,000 for their Australian trip and receive a $300 check each year from their co-op. They may revise their goal to say “$5,000 for a trip to Australia, need to save $5,000 minus $1,000 in savings and $1,500 co-op distribution check, or $2,500.”
Now decide how much money you would need to save each month to achieve that goal. First turn the number of years you have to reach your goal into months, then divide the dollar amount of your goal by that number.
In the Australian trip example, the couple would have five years or 60 months to achieve their goal of saving $2,500. Sixty (months) divided by 2,500 (dollars) equals 41.66. That means this couple need to save $41.66 each month for five years to reach their goal. Doesn’t $41.66 a month sound a lot more manageable than the original goal of $5,000?
Once you have determined the dollar amount per month, you may discover you do not have enough cash flow to reach all your goals. That is where your order of priority comes in.
What are you willing to give up so that you will have the resources necessary to reach this goal? How hard are you willing to work and save to achieve a particular goal? Are you willing to take on a second job? How realistic is each goal when compared with others?
You may need to reorganize your goals. Put those that are now unrealistic back on your wish list. If circumstances change, you still may be able to realize those dreams, too.
For those who are part of a family, you can repeat this goal-setting exercise with your children, partner or both. Considering and respecting each member of the family’s goals is important.
You may need to limit each person to two or three short-term and long-term goals. Once everyone has written up the financial aspects of their goals, the couple or family needs to look at competing goals and re-prioritizing them as a family.