Organize by setting goals

I think it was Brian Tracy who said that when you write down your goals, the universe begins to work with you to make it happen. My experience has pretty well shown that to be true. The goal of course has to be realistic. I could write down, "I want to be a millionaire by tomorrow at 7:00 p.m." But we know that won't happen unless I won the lottery. And since I didn't buy a lottery ticket, that is not going to happen. However, the realistic financial goals my wife and I have written down have happened, and well in advance of our target dates. See my post on 6 Steps to Financial Freedom to see how we met our financial goals nine years ahead of schedule.

Why set goals?
"If you don't aim at something, you'll never hit it." "If you wander around aimlessly, you'll never get to where you want to go." "To fail to plan is to plan to fail." These quotes all give us reasons to set goals. When we have goals, we are aiming at something, we have a direction to go, and we have made a plan so that we are not planning to fail.

What makes a good goal?
People who have advised us on setting good goals say that goals must:
1) be written down (otherwise you'll forget what they were and that you were working toward them),
2) be realistic (so they are possible to achieve),
3) be specific ( so you know exactly what you are aiming for),
4) be measureable (so you can tell when you have achieved them), and
6) have a specific deadline (so you keep working toward them rather than procrastinating).

Test your goals.
When you set a goal, test it with the above criteria. If it doesn't meet one or two of those standards, rewrite it until it does. You may have to let a goal simmer overnight to bring the clarity it needs. Then try again the next day. Keep writing and rewriting goals until you know they are right.

Update goals.
Don't be afraid to change or update goals as necessary. They are not carved in stone, unless your only goals are the original Ten Commandments. Circumstances change. Since we met our financial goals ahead of schedule, we made new ones. Most of those are retirement goals. I've moved my retirement date ahead by 3 1/2 years. That was well worth setting some goals and a great benefit of achieving them.

Some Examples
Let's test a couple of examples.

Example # 1: "To become a millionaire by tomorrow at 7:00 p.m." What's wrong with that goal? It meets all of the criteria listed above for a good goal except it falls way short of criteria # 2, being realistic. So don't set that as a goal.

Example # 2: "To improve my blogging skills." This falls short of several of the criteria. It is not specific or measurable. How will I know when I've achieved this goal? Plus there is no deadline. I could work on this goal for the rest of my life and never know if it is done. Or I could read one post on blogging tips and say, "Well, I'm done with that goal."

Example # 3: "To pay off all my current credit card debts by 12/31/08. That goal is realistic and very specific. I can know when I'm done with it, and I've set a deadline. Now I can begin to make some action steps to make it happen.

Goals can be very helpful for organizing our lives and getting done what needs to be done. Use goals wisely and you can free up more time to have fun. That was my only New Year's resolution a few years back. "To have more fun." That is not a good goal according to the "Good Goals" criteria, but it made a good New Year's resolution. As I look at retirement in a few years, that is going to be my motto: to have fun. I don't plan on working until I drop dead. So I have my retirement goal: the date is set and the plan is to have fun. Now my current goals are all working toward that.

Happy goal setting! And have more fun while you can.

6-Steps to Financial Freedom

Early payoff of debts has one great advantage - FREEDOM. Here is how to do it.

1. List your long term debts, like credit cards, house payment, a 2nd mortgage, car payments, etc.

2. Figure out how much spendable cash you have using my 3-Step Organizational Plan to manage your money.

3. Decide how much of your extra spendable cash you are able to and willing to apply toward these debts, whether it be $25.00 or $300.00.

4. Decide which debt you will apply any extra toward first, and pay just the minimums on the rest. Usually the best bet is to apply extra toward the smallest one first in order to get that paid off as fast as possible.

5. When the first one is paid off, take that total amount you were applying to it and apply it to the one you want to pay off next, usually the next smallest one.

6. When that one is paid off, repeat step 5 above until all debts are paid off.

Here's how it worked for us.

Our Goal: to have all debts paid off in time for retirement. We didn't want any house payments, credit card bills, car payments, etc. following us into retirement. We plan to have fun, not pay bills.

Our process: We listed our bills including credit cards, mortgage, 2nd mortgage and two car payments. Then we projected out when each would be paid off applying extra toward one, then applying that full amount to the next one, until they were all paid off. Following that plan would get all debts paid off in time to enjoy retirement.

Our result: This worked so well, we got all debts paid off nine years ahead of the schedule. In fact, now I have set the date for early retirement.

It will work. All you have to do is make the plan and follow it. Or to use a well worn phrase: Get 'er done!

See Update on this post at Organizing For Retirement posted 5/26/07.