Financial Literacy, Financial Literacy Awareness Month, Financial Literacy Month

Want to Experience Financial Freedom? Then Set Goals

Want Financial Freedom? Then Set Goals that Matter

In each of us, there is an emotional shopper of varying degrees. Some of us are better at recognizing when our emotions cloud our good judgment while others are not. I found the best way to make sure my emotions aren’t guiding my purchases is to have goals.

I happen to love goal-setting, but I know not everyone shares my enthusiasm. Some equate goals to more stress, more pressure and the potential to fail. This is not how I want you to think about your financial goals.

My father taught me money was a gift. But when I look around, I see very few people who treat it as such. There are many negative emotions tangled with money—guilt, hate, power, greed, jealousy, etc. But I was taught to view money as a gift that I could use to bring joy to myself and others.

But, in order to do this, I needed to set goals that aligned with my values. Once I had goals, then money decisions would come easily and without regret. Money would no longer control me, and now I could use my money in a joyful way that honored my values.

What Matters to You?

Think about what truly matters to you. What are the things you want to do and would regret not doing or having? These are your goals and you should feel personally invested in achieving them. Make sure these are things you want and are not fulfilling other people’s expectations.

Too often I see people chose goals that others suggest for them or to keep up with Joneses. You should feel genuine excitement for your goals. Otherwise, you might abandon your goals when temptation strikes, because they were not important enough to you.

The Two Most Important Questions

Your goals give your money purpose and act as a barometer. When you find something you want but don’t need, slow down and ask yourself:

  1. Will this bring me closer to achieving my goal?
  2. Or am I feeding an emotion?

These two simple questions have prevented me from buying things that I would have regretted later and kept me focused on achieving my goals. Remember—you are not depriving yourself anything when you chose to honor your goals and values.

Goals = Financial Freedom

Many have successfully changed old behaviors, habits and mindsets to achieve financial freedom and others are diligently working towards it. Money is emotional and I believe those who do not recognize their emotional triggers will have a greater chance of falling back into old habits.

Financial freedom takes a lot of hard work to obtain AND maintain. Some say once they earn it, they will never return to their old destructive habits. I don’t disagree with their intent, but I also know it will be much harder for them succeed long-term without goals to balance those times when their emotions get heightened. It then becomes very easy to justify a purchase when you don’t have anything to weigh it against. If you want to be financially free, then you must have goals.

We set annual save, spend and share goals as a family and individually. Over a favorite meal, we decide how we’re going to use our family money and who we are going to share our money with throughout the year. It unites us as a family when we work towards achieving a common goal together and gives me a better answer than “no” when the girls get the “I wants”.

Financial Literacy is Within Your Reach

We all make money decisions every day and understanding where we are now, what causes us to spend or not spend and having goals helps us make make mindful choices. Becoming financial literate doesn’t happen overnight, but the end result of financial freedom is well worth the effort.

What are your goals? What motivates you to not spend your money?

Shannon

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Photos courtesy of www.freedigitalphotos.net.

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Comments

  1. Wednesday, April 10th, 2013
    Shannon, what a wonderful, motivating post!! I love your "two most important questions". They are definitely crucial in facing the crossroads of "Should I, or should I not, spend this money?" Thanks for the motivation today!
    • Wednesday, April 10th, 2013
      Thanks, Laurie! I appreciate your kind words!! Those questions have helped give me perspective and prevented my emotions from purchasing something I didn't really want. Sometimes I pick up something I like at the store just to ask myself these questions in front of the girls. I think it's good for them to see me choose in favor of our family goals.
  2. Wednesday, April 10th, 2013
    "Remember—you are not depriving yourself anything when you chose to honor your goals and values." I could not agree more Shannon! I think goal setting is vital to experience that freedom you're talking about. My approach is to set those goals and then make them forefront in my mind so they're easy to remember. That way it's top of mind and helps guide my decision making process.
    • Wednesday, April 10th, 2013
      You got it, John! I haven't find anything better than goals to help guide our decisions. Otherwise, what are you weighing your decisions against? A big, fat nothing, which just makes it easier to pull out the credit card and charge it. Goals keep me grounded and focused. And these types of goals are fun too!
  3. Wednesday, April 10th, 2013
    Setting goals or priorities is something we struggle with. I guess right now our priority is to make more money and pay off our remaining debt. Somedays I think we feel stuck in creating new goals outside of that because paying off the debt just seems so over-powering.
    • Wednesday, April 10th, 2013
      Debt definitely holds a lot of power over one's life and I can see how it's hard to create new goals until you rid yourself of your debt. When debt elimination is the big goal (and certainly a worthy one) I think it can be important to set milestone goals along the way. Staring at one large number can be overwhelming and it takes time for that number to fall. But celebrating little milestones along the way - can boost morale and keep you motivated.
  4. Wednesday, April 10th, 2013
    Great post Shannon. I only have saving goals, once they are reached, the rest is there to be spent. If the goal seems to big, I break into smaller, less daunting goals. And yes you have to remove the fear of failure, it is better to reach 60% of a goal than nothing at all.
    • Wednesday, April 10th, 2013
      Thanks, Pauline! That's a great idea to break big goals into smaller, bite-size pieces. It's very easy to get overwhelmed with big goals and that is when people give up. A shift in perspective can definitely go a long way too.
  5. Wednesday, April 10th, 2013
    Goals are so important and I think this was an awesome post Shannon. Well done. If I didn't have goals, I would still be paying off my credit card debt. There are times when I have my little shopper try to take over, but then I always wait a few days to make most purchases in order to think about them. Most of the time, I decide against them.
    • Wednesday, April 10th, 2013
      Thanks, Grayson! Goal-setting may scare some people, but it shouldn't. They really do make a huge difference. We all have days when our inner emotional shopper wants to take charge, but knowing that alone makes a huge difference and allows us to step back. You're definitely smart to give yourself a few days to think about purchases. If you still want it after the allotted time, then you know it's something you truly want whether you can buy it right away or have to make a save goal.
  6. Alan@escapingmydebt
    Wednesday, April 10th, 2013
    Hi Shannon,
    My wife are about to have that talk once I consolidate a few things. We need to set real goals this time, not just roundabout targets we shoot for.
    It was nice to read about you on two other blogs today.
    • Wednesday, April 10th, 2013
      Thanks, Alan! That will be a great conversation for you and your wife. Working together towards concrete goals feels good and you have each other for support. I'm glad you enjoyed my interviews at Tackling Our Debt and The Frugal Farmer. Sicorra and Laurie are fabulous ladies and I am fortunate to have them as friends. :)
  7. Thursday, April 11th, 2013
    Great post! I am a goal setter and I always have to remind myself of my long term goals so that I don't get off track! =)
    • Friday, April 12th, 2013
      Thanks, Holly! I know you and Greg are big planners. :) Goals definitely keep me on track too! They are worth the time and effort to create.
  8. Thursday, April 11th, 2013
    Setting financial goals is important! Right now, my main goal is to pay off my credit card :) Once that's done, I can focus on new financial goals.
    • Friday, April 12th, 2013
      Paying off your credit cards is a great goal and once you achieve it - you'll have a fresh start, which will feel great! It can definitely be difficult to divert money to other goals when eliminating debt, but once that debt is gone - game on! Or maybe goals on! :)
  9. Friday, April 12th, 2013
    I think setting goals is very important. Getting started, for most, is usually the hardest part. But I think if the goals you set are too far away, it can sometimes be daunting. That's why we like to focus on shorter-term goals, like where do we want to be, 3-6 months from now. Great post!
    • Friday, April 12th, 2013
      I agree - getting started is always the hardest part. But once you do it and reap the rewards, it definitely becomes much easier and more fun! Our annual goals are more short-term, things we want to achieve within the year, but we do set long-term goals around retirement, etc. I do agree that if you're new to setting goals, a short-term goal is a great way to start, so you can achieve a goal quickly and want to set more goals.
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
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