Defining Goals and Staying Motivated

Dreams into GoalsMost of us have things we would like to accomplish or have in life, but how many of us put those ideas down on paper? Are these thoughts dreams or goals, and what is the difference? A dream is a vague concept of something you would like, with no clear method of obtaining it, i.e: “Someday I’m going to be rich!” or “I want to run my own record label!”.

In order to change these dreams into goals, they need to first be realistic and achievable. They need to have a deadline, and action steps that will take you to the goal in the time frame desired. For example, taking “Someday I’m going to be rich!” into a goal would look something like this:

I plan to have a net worth of $1 million by age 50. This gives me 25 years to accomplish this goal. I plan on accomplishing this goal by assigning $1100 per month from my budget and investing it in stock index funds. With an average annualized return of 8%, I should break $1 million in 25 years. My first action step is to increase the delta in my budget to allow for $1100 in savings per month. I will do this by picking up a part time job earning $200 per week and cutting current monthly expenses by $300 per month. My second action item is to automate my savings so that I don’t have to think about it every month. My third action step is to monitor my investments over time to ensure I am on the right track, adding more money into savings as time goes on if needed. Goals along the way: Break $100,000 in 6 years, $250,000 in 11 years, and $500,000 in 18 years.

This is what a goal should be. There are defined action steps, there is a time line and it is realistic. This also gives someone a win frequently. Every month that the money goes into investments is a small win. Every time one of these mini-goal milestones is hit is a win. Winning frequently is imperative to sticking with goals. If it feels like all you do is work and the goal is so lofty it looks like it will never happen, chances are you will give up on it. Track it: I have a dry erase board hanging in my office that I track goals on. It helps a lot to see how far you have come over time to stick to your goals.

Setting goals also does something very important: It gives us something to strive for. If we are consumed with short term, day to day life, then that is all we will have. Setting goals allows us to move forward in life by applying a bit of pressure over time in a certain direction.

Listening to other people’s goals and successes is what helps me stay motivated. I love asking people about their goals and how they are working towards them. Motivation, like attitudes is infectious. Being around motivated people helps to stay motivated. I love listening to the Dave Ramsey show, especially on Friday’s when people call in to share their stories about winning with money. There’s nothing like hearing about a couple in their early 30s who paid off their home, or someone in their 20s who just knocked out $50K of student loans. These stories and the energy and excitement being conveyed by these people is an awesome tool for staying motivated.

Personal Finance is only about 20% knowledge and math and is 80% behavior. While it’s easy for a nerd like me to make spreadsheets and share my knowledge, it’s more difficult to share my motivation and to talk about personal habits. Its our habits and actions and thoughts in our everyday life that determine what happens. The financial knowledge is important, but is only a small part of the equation.


John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. John is the author of the book For My Children's Children: A Practical Guide For Building Generational Wealth.

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