This post by Matt McKeever on Instagram really struck gold with me over a year ago. I had actually put the link into this blog post with the title you see above, and then saved the post as an idea. Well, today I decided that I would finally write this article. I believe that seeing this post in my drafts list at this point really helped me understand that it would be beneficial, not just for me, but for my readers as well. Understanding your own personal circumstances and challenges is a first step to making forward progress. Goal Setting will enable you to reduce your stress levels, anxiety, and overall feeling of doom and gloom.
What Goals?
Everyone should have goals, that’s pretty simple. Goals to get better at a sport, instrument, or math. Maybe some people have goals to spend more time with their family or friends, and maybe some have goals to get to level 50 in Pokémon Go and complete their Pokédex with all variations of every single Pokémon in the game! The point is, it’s great to have goals and it gives you and everyone else a direction in life.
Mental Health and Goals
Recently, I divulged to my fiancée that I have been having a lot of anxiety over some of our financial goals. In the next year, we are looking to purchase our first house. However, as I’m sure most of you can understand, purchasing a house requires a significant amount of money up-front for down payment, inspections, and closing costs. Our goal is to hit about $20,000 saved up before we attempt to purchase a house, that way we can still make a decent-sized down payment for the house, cover closing costs, and still purchase some furniture and appliances. Where I was going wrong is that while I was working through our spreadsheet and YNAB I was trying to modify too many different dollar amounts for too many payments all at the same time.
You may find that another article I wrote last year hits on a similar type of topic: Start Fresh; Refocus on Becoming Financially Independent
Time to Get SMART
So how did I fix this? Well, I started implementing more of the S.M.A.R.T. goal measurements in place.
- Specific: ensure that you specify exactly what your goal is, make it narrow and focused.
- Measurable: Define what determines the progress you’re making. Is progress measured by how many months something took or by how many dollars something has been paid down?
- Attainable: Ensure that you can reach your goal within a reasonable time-frame
- Relevant: Your goal should align with your values and long-term objectives
- Time-Based: Set a realistic, ambitious time-frame for completing your goal.
In this case, I have defined separate spreadsheets for paying off a personal loan, defining how much it is, how much to contribute a month, and then giving a payoff date. The next spreadsheet is set for paying off a car loan. This again has a set start date, and aligns to how much extra money can we throw at this loan. Finally, I have a few more spreadsheets that are more designed around: paying off student loans, estimated costs for being financially independent (FI), estimated costs for being FI/RE’d, and also defining some retirement goals of ours.
Closing Thoughts
By approaching my anxiety of this situation in this manner, I was able to talk it over with my fiancée, explain that I was having anxiety, and then explain how I resolved the situation by implementing SMART goals. Initially, she was extremely confused because we went from paying $200 on the personal loan and contributing $800 to savings a month, to making $1,000 personal loan payments, and $1,000 contributions towards savings. By explaining to her exactly how I was making these changes and where the extra money was coming from, she understood. My anxiety went away and I was finally able to start sleeping better at night.
I realize that this post doesn’t fit the title super well, but I think it does a good enough job getting my point across. During every point of my adult life, finances has been in some fashion a point of anxiety for me. By sitting down and understanding exactly what we want to accomplish, when we want to accomplish those goals by, and figuring out how we are going to accomplish them, enabled me to rid myself of anxiety and to bring my significant other into agreement on the plan moving forward.
You may find my other post, The Financial Independent Way of Thinking, to be a decent read as well. Feel free to let me know your thoughts in the comments below!
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