We all have money goals and they give us some direction and purpose in life. But there are times when we give up on these goals for various reasons. And one of them is when you end up with complicated goals. It could have started as a simple target but over the course of a few months, you might have added a few more things making it complicated.
There are a few reasons for this to happen. One is that you could add small details to a specific goal over time. It could be raising the target amount, dividing where the money comes from, or even where a part of it goes. These are just some of the things which could complicate the way you see your goals.
If your goals are starting to become too complicated, here are a few tips to help you simplify and make them a little less overwhelming.
Set specific money goals
To start off in the right direction, you need clear and concise goals. This is the first step to reaching your goals and avoiding overcomplicating things. Do you want to set down goals to help you buy your first house? It might even be trying to secure your children’s future, especially with the cost of attendance in college.
It could be a retirement goal where you aim to leave the corporate world within a specific number of years or at an exact age. This requires a lot of forward planning as well as consistency on your part. And for you to get ahead and do all these things to have a clear understanding of what your goals are in life.
If it helps, list your goals down on paper or on your computer. The idea is to make it accessible and easy to get your hands on if you need to look at it. You can even frame it and hang it on your wall or even on your table. This way, you always get to see them and be reminded of them. Remember, concise targets help you set specific money goals.
Break them down into smaller targets
Now that you have set specific goals and money targets, the next best thing to do is to break them down into smaller steps. For one, it could easily overwhelm you if you set your sights only on the big goals that you have. Breaking them down into smaller steps can help you see the direction you need to take to reach your goals.
If you want to buy a house, the six-figure price could distract you. But if you take that amount and divide it over several months of savings, it makes the goal a lot more doable. This is probably one of the reasons why the homeownership rate in 2022 was at 65.9% according to Statista. If you need a $20,000 down payment for a house, that is a big amount to come up all at one time. So the idea is to divide this amount evenly over a period of time.
If you have a couple of years before you buy the house, divide the amount of the downpayment over how many months you have. It might not seem like a revolutionary approach but the effectiveness is in its simplicity. Breaking down seemingly large goals into smaller numbers makes moving forward in the right direction easier.
Have a system to measure your goals
Simplifying money goals also means that you need a system to measure your progress. For one thing, it shows you how far you have gone from the time you started up to the present. It gives you a great feeling to see the progress you have made. These small mental wins can propel you to move forward in the right direction.
The most basic system you can use is having a comprehensive household budget. This will give you the ability to know at any given time the status of your income and expenses. It can also show you the progress you have made in terms of your savings. How much you have set aside for various funds like your emergency fund, retirement money, or even for the college expenses of your children?
List down realistic goals
This is important when you want to simplify your money goals. Keep in mind that there is nothing wrong with dreaming big. Owning a home, running your own business, or even becoming VP at work. But remember that all of your big goals take time and a lot of hard work. This is why you need to be realistic about what you can achieve now.
It would be difficult to simply go out and purchase that house you want right now. Yes, it is possible but you could be putting your finances in deep trouble. From huge interest which can lead to huge house payments. What you can do now is simplify and aim for realistic goals. Rather than buying a house right this instant, why not focus on saving for a downpayment instead?
Rather than setting up a business, take classes or courses to help you manage your future business. You can also take up post-graduate studies to help you climb that corporate ladder. The idea is to keep your sights on your big goals but break them down into realistic targets. These simplified goals should be something you can achieve sooner than later.
Make sure you set a timeframe for it
The biggest factor that separates your goals from mere dreams is a timeline. When you simply dream of one day owning a home without putting a target date to it, then you might not be motivated to work on it. But if you set a date to it when you finally want to buy a house, you now put things in motion. You start to plan out your goal step by step.
You look for homes, check the price and begin saving up for the downpayment. With your target date in mind, start working your way backward. This will allow you to figure out the amount you have to set aside every month until the time you need to put down on a house. The same approach can be done with other goals you want to reach.
Attaching your money goals to a specific date can give you the chance to assess your progress. It can help you understand if you need to make adjustments and where you need to do it exactly. If you are behind on your savings, you know exactly the amount you need to make up before your target date. Remember, the date you set should motivate you in reaching your goals.
Enjoy the process
Stress is a big issue for most people. And there are times when it affects you as well as you go through your journey of reaching for your goals. The idea is to not let stress linger too much that it starts to take the fun and enjoyment out of your journey. Work through the problems that stress you out. If not, you run the risk of overthinking and overcomplicating every little thing including your financial goals.
Complicated money goals tend to discourage you from going after them which is why it is important to simplify these targets. The simpler they are, the easier it is to stay on track and achieve your goals.