Planning Series Part 2: Write Meaningful Goals

As a product owner by training, I know first hand the importance of writing goals down. At my day job this habit saves confusion when words are understood two different ways, is a reference point and decision making tool when gray areas surface that need a decision and maybe most effectively, goals are a time capsule of alignment and commitment.

There are many tools of the trade in Software Development Lifecycle that we use to help define goals. There are things we can do to take mediocre goals from okay to good, and from good to great. I’ll share with you ten of my favorite professional tactics and tools to determine meaningful financial goals.

1. Start with “Why”.

Always start with your ‘Why‘. Once you have your Why, the goal is now visualized – and a future state is created. Our neurons and synapses have linked like Avatars mating under Tree of Souls….. A connection is made. I speak about my ‘Why’ more on the Ready2Budget home page, as well as in ‘The Uncrackable Egg‘.

Because pictures are truly worth a thousand words, once you pin point your ‘Why’, find the image that most closely captures what your why is, and what it means to you.

My why…

2. Compare your current to your future state.

Do this: Review your online statements from Credit Cards, Checking Accounts, Utilities, receipts etc. Every time something pisses you off, makes you afraid or even a bit noxious – write it down just as you felt it. Don’t try to format or finesse it. Capture the raw emotion, verbatim from your gut.

For everything on that list – things like fees, over spending, lack of retirement accounts, need a bigger emergency fund etc., get an adult beverage or a good cup of tea – and start writing down the opposite of those pain points. Write things like “No fees”, “Build a budget you can live with” and “Start a small retirement account.” Et Voila! You have a first pass at your goals.

Download this Goals Brainstorming Worksheet to get started.

3. Think “SMART Goals”.

SMART goals have been around for a while – if you’ve ever written a resume, had an end of year company review, you probably know what I’m talking about. Its a mnemonic to remind us of what characteristics an effective goal has.

  • S = Specific. Make goals specific and narrow for effective planning.
  • M = Measurable. Define what evidence will show progress.
  • A = Actionable. Winning the lottery is not actionable. What is within your control to accomplish.
  • R = Relevant. Your ‘Why’.
  • T = Time bound. A realistic and ambitious end-date for prioritization and motivation.

We’ll look into my Product Management toolbox to pull out somethings to help us really define SMART goals at each level. If you go no further than this worksheet, you are well on your way to having well-defined goals.

Download this SMART Money Goals Worksheet to get started.

4. Describe your vision.

At my day job, we use “Definition of Done” are vision statements that describe what ‘done’ looks like. We reference these definitions as goals or objectives of our projects. It clarifies what our expected outputs are, and let’s use know when we can sit back and appreciate our accomplishment.

A “Definition of Done” is exactly what it sounds like. A statement that describes what this thing looks like, feels like, smells like when its done. Let’s use a ‘cake’ example because… why not.

Close your eyes for a moment and imagine a cake. Just do it. What kind of cake is it? What purpose does the cake have – first birthday or wedding cake? Long-day-at-work-I-need-a-slice-of-cake-from-Wally-World cake? You get the idea. Okay – have your cake? Read on.

Looks absolutely nothing like its individual ingredients, right? Comes out completely different. Your goal is the final cake that comes out of the oven. Describing that cake is the same as describing your goal. Be specific! You are effectively defining what this thing looks like when its done. A one-year-old smash cake has a vastly different purpose than an exquisitely designed wedding cake.

On your SMART Goals Worksheet::

  • Visualize your goal from the Brainstorm Worksheet.
  • Define it in your mind until the picture is in crystal clear UHD.
  • Write one specific goal per SMART Money Goals worksheet in the “S” Specific section.
  • Use one worksheet per goal. Order them top to bottom, in priority order. They will go in your binder this way.

5. Use mile-markers to show progress.

Key Performance Indicators (KPIs) are quantifiable measurements that help us achieve goals. They show progress objectively, letting the numbers do the talking. Imagine mile-markers driving down the highway. You can judge the distance and see the ground you’ve covered by understanding that you’re measuring distance in miles (or KM). Here are a few examples of financial KPIs I reference along my road to financial freedom:

  • Pay all bills on time (zero late payments)
  • Pay down debt (is debt going down or up)
  • Save 10% of paycheck towards retirement (is 10% going towards retirement)
  • Reconcile my accounts each pay check (am I doing this biweekly)
  • Track all my expenses in real time / at the point of sale (am I doing this)
  • Can I sleep at night, not worrying about finances
  • Increase my net worth (is the gap between assets and liabilities growing)
  • Etc.

On your SMART Goals Worksheet:

  • Think about the goal you wrote on the “S” Specific Sections.
  • On each worksheet, fill in the “M” Measurements Section of your SMART Money Goals worksheet. Think about indicators that show movement and progress over time.

6. Focus on what you can control.

Think about what is within your circle of control. What can you change, and what is fixed for the time being. Focus only on that which is within your control. For instance:

  • Example: Actionable, within my control / outside of my control
  • I can reduce my food spending by eating in more / My family has special dietary needs
  • I can increase my salary through education and training / Winning the lottery
  • I can adjust my income tax withholdings / Fix the government

On your SMART Goals Worksheet:

  • Think about the goal you wrote on the “S” Specific Sections.
  • On each worksheet, fill in the “A” Actionable Section of your SMART Money Goals worksheet. Think about what things you can do starting right now, in a few weeks or a few months from now to help deliver this goal.
  • Take time on each action section. Really think about what will need to happen in order to reach this goal.

7. Connect your Goal to your ‘Why’.

Given your ‘Why’ is the driving force behind all this – why you’re reading this right now, why you’re focused on setting goals and meeting them – it only makes sense to take a few moments, and connect the dots because to your ‘Why’. Make it relevant and meaningful to you.

On your SMART Goals Worksheet:

  • Think about the goal you wrote on the “S” Specific Sections.
  • On each worksheet, fill in the “R” Relevant Section of your SMART Money Goals worksheet. Think about how this goal connects to your ‘Why’.
  • Take time on each goal worksheet to connect the goal back to your ‘Why’. Really think about how this goal enables your ‘Why’ when its delivered.

8. Milestones & Deadlines (Timebound)

On your SMART Goals Worksheet:

  • Think about the goal you wrote on the “S” Specific Sections.
  • On each worksheet, fill in the “T” Time Bound Section of your SMART Money Goals worksheet.
  • For each goal sheet, identify a challenging, but reasonable duration to accomplish this goal. Is this a month long goal? An annual goal? a 5 year plan? a 20 year plan?

9. Context. Context. Context.

Consider where and how you’ll use your goals. I keep my goals handy in meaningful places – like my heart and soul. That is another benefit of starting with your ‘Why’ – no reminders needed. It drives you at your core.

If your head needs a little help though, keeping up with your heart and soul and the meaningful ‘Why’ you’ve identified, think about the context of where those goals might need to give you encouragement when things get tough.

For instance, I keep my financial goals written in my Budget Binder and my nutrition goals on the side of the fridge. Those goals posted in context of where those decisions are being made, serves as a good reminder as to how we get to our destination.

10. Pull it all together.

In your Budget Binder, I recommend organizing these sheets in the front of your binder to serve as are reminder of what your objectives are. Sort them in order of priority. Take notes along the way. When a goal is complete, sign the bottom and date it. Move the sheet to the back of your binder so you can catalog all your progress over time, and see how far you’ve come.

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