Alright that’s a harsh statement but looking back on your previous “resolutions” how many of those would you say that you actually obtained? How do you know? That’s the problem a New Year’s resolution is typically something to the effect of “I’m going to lose weight in 2010” or maybe “I’m going to pay off debt in 2010!” You added the exclamation mark so everyone knows you are serious. Don’t get me wrong I’m all for setting a target and working towards it but the stuff of New Year’s resolutions more often than not are mere sentiments rather than marching orders. I want to look at my chart, or spreadsheet and know that I’m killing it. Yeah you bet I’m paying down debt and I only have $5635 to go! Being the task oriented person I am I require more and maybe this is you too.
I’m not going into a drawn out discussion of different goal mechanisms because I think in the end it depends on the type of person that you are but there certainly are characteristics of a goal which make it more meaningful and hence useful. Many use the idea of a SMART goal. SMART is a mnemonic for Specific, Measurable, Attainable, Realistic and Timely. At my day job we set yearly commitments using SMART goals and we are measured against them. You can choose the components that work for you and for me that means that my goal needs to be Specific with an action plan and that I can Measure how I’m doing against that goal. Without some form of instrumentation for your goals it’s like you’re flying blind. “Pull up Cougar you’re too low!”
So I’ll give you a couple of goals I’ve set for myself for 2010. These are specifically related to my personal finances.
- GOAL: Pay off remaining car loan to be debt free by January 31st 2010. EXECUTION PLAN: Tighten budget for January, sell various items on Craigslist and eBay. Sell motorcycle. SUCCESS CRITERIA: Will have saved $8537 for final car payment.
- GOAL: Build 6 Months Emergency Fund by September 2010. EXECUTION PLAN: Continue monthly budgeting of $XXXX dollars a month to online savings account. SUCCESS CRITERIA: Ally Bank savings balance will be $YYYYY by the end of September
- GOAL: Fund a Coverdell Education Savings Account for each boy by the end of 2010. EXECUTION PLAN: Save $4000 once emergency fund is complete by utilizing stock awards and budgeting monthly. SUCCESS CRITERIA: $2000 for each boy will be invested in their Coverdell’s.
- GOAL: Contribute 10% of my income to my Roth 401k by the end of 2010. EXECUTION PLAN: Once the emergency fund is fully funded begin contributing again to my Roth 401k. SUCCESS CRITERIA: Bi-weekly contributions will be pulled from my paycheck.
- GOAL: Travel to Australia in 2010. EXECUTION PLAN: Once all financial goals are achieved begin saving for our family Australian Vacation. SUCCESS CRITERIA: Arrival in Melbourne!
Those are my goals for the year as it relates to my finances anyways. How about you, what are you working towards in 2010? Do you have a favorite mechanism for setting goals? I’d love to hear them.