Common Ways People Sabotage Short-Term Financial Goals
You might think it would be easy to put together a short-term financial plan – for example, put off for a vacation or set aside an extra month’s earnings for your emergency fund. After all, you only need to tighten your belt for a limited period of time. Plus, results come faster, which motivates you to stay on course.
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But small monetary goals oddly end in failure because even financially savvy people don’t pay enough attention and attention to creating a workable plan. Are you to blame for this?
To understand this, read this summary of common mistakes that can get in the way of your efforts.
You are not setting a realistic time frame
Expecting you to reach your goal on a too tight schedule is a common stumbling block. For the same reason why emergency diets never work: you think you can handle huge sacrifices in weeks or months, but the conditions are too harsh and your efforts are failing.
Natalie Taylor, CFP®, Financial Planner at LearnVest Planning Services, agrees. People tend to fail to comply with their decisions when the time frame in which they want to reach their goal is simply not possible given their current resources, she said. Not only does this set you up for failure, it “makes it harder to feel motivated over time.”
So be comfortable with yourself how long it will take you to reach your goal, given your lifestyle and financial situation. Let’s say you’re hoping to save $ 500 on a weekend trip. It’s better to give yourself a few weeks to adjust to financial compromises or find excess cash flow, rather than overexerting yourself to achieve a goal that is simply incompatible with your current situation.
You don’t write a solid plan
While people are more likely to outline specific steps to achieve long-term financial goals, such as saving for retirement or buying a home, “Another major mistake I see is having a goal, but not creating a plan to achieve it. “Says Taylor.
Making a plan gives you the freedom to focus; it also helps to clearly define how you will be able to achieve your goal, as well as understand how it fits into your daily life. Ask yourself, “How much do you need to invest in achieving your goal each month? Does this amount fit within a budget that is reasonable for you? Can you get some extra cash from the side show to make more progress? Taylor suggests.
And don’t just ponder it; write it down. For example, if you are hoping to save money on a new laptop, write down not only how much money you will save each month, but what you can donate to make it happen. “Recording a goal is an action; the moment you move from idea to action, you are more likely to take additional actions to achieve your goals, ”says clinical psychologist Ben Michaelis , Ph.D.
You are not tracking your progress
In order not to stray off course and achieve your goal, it is important not only to keep yourself in control, but also to remind yourself of the progress made. Recognizing and celebrating milestones – such as reaching the middle of the road and then the three-quarter mark – gives you the incentive to keep going.
To do this, break the overall goal into weekly or daily, and then check how you are doing more often, ”says clinical therapist and life coach Kara Maksimov , LCSW, CPC.
“Set what you want to achieve every week, and start the day off by reminding you exactly what you want to achieve, what you have done so far and what are your next steps for today,” Maksimov advises. Consider creating a spreadsheet or chart that provides a quick visual snapshot of your progress, and use them to cheer yourself up and see the end is near.
Are you sabotaging your short-term financial goals? | LearnVest