It’s tough to ignore the endless memes circulating about the new decade that’s approaching. But what’s even harder is understanding how to mentally — and financially — prepare for the years ahead. Every lap around the sun presents new opportunities and challenges, and one strategic way to conceptualize changes you hope to make in the next decade is to set goals that provide direction and focus.
As Brent Weiss, Certified Financial Planner and head of planning at online financial planning firm Facet Wealth explains, with specific and tangible goals in mind, we’re more likely to hold ourselves accountable. They also serve as guidance if you happen to encounter any hiccups (as you likely are in the next 10 years). “Life is meant to be an exciting journey, so make sure you enjoy it. However, you should be thinking about planning for tomorrow while enjoying today,” he says. “Let your goals be your inspiration, and they will motivate you to achieve things you never thought imaginable.”
Here’s how to set financial goals for the decade and strategies to help achieve them.
Make goals personal
It’s easy enough to aspire to save $100,000 over 10 years — but for what? A home? Retirement? Paying off student loans? Goals need to be meaningful to you and tailored to your unique path — not that of your friends or family — or else you won’t be inspired to achieve them.
“Setting goals that are based on your values and your personal beliefs will not only motivate you but will make success more likely as they are tied to your authentic self,” Weiss says. “Being true to yourself is a key element in achieving your goals. Whether it’s becoming more active in your community, gaining life experiences through travel, or investing in your own personal or professional growth, make it about you. It’s OK to be a little selfish here.”
Weiss suggests adding a bit of color to your financial goals. One way to do that is to create a vision board with pictures and notes about what you envision and why it’s meaningful to you.
Make sure they are reasonable …
Sure, starting a company that eventually rakes in millions a year might happen. Winning the lottery? Sure, that would be amazing. While having out-of-this-world aspirations helps keep us believing in the impossible, when considering goals for the new decade David Reiling, CEO of Sunrise Banks, suggests setting at least a few that are down-to-earth and attainable.
Setting achievable financial milestones will help you maintain your momentum over the long haul. “It’s important to go easy on yourself with goals that won’t break the bank or make you miserable,” Reiling says. “If you set unattainable goals, you’ll start dreading the financial planning process, and that makes it more likely you won’t keep your resolve to plan ahead.”
… but toss in a few outrageous goals
Or as Weiss puts it: Dare to have terrifying goals. Along the same lines of ensuring a goal is quantifiable and achievable, leave room for a few of those lofty dreams by setting goals that are exciting, maybe a little scary, and that push you beyond your comfort zone. (How does saving $1 million sound?)
“The purpose of these types of goals is not always about success,” Weiss says. “Sometimes it’s about investing in yourself, stretching for something, and sometimes failing which can be a key ingredient in learning, growing, and finding the right path forward.” Setting a handful of outrageous financial goals keeps us engaged and holds our attention. And who knows what you might be able to achieve in 10 years’ time.
Write them down — and give them a time frame
Remember that happy hour right after you graduated where you and your closest girlfriends vowed to meet that one career goal by the time you all “grew up”? What? You don’t remember? Don’t worry: That’s the typical outcome when we don’t write down specific goals we want to achieve, says Paris Davis, the senior vice president and retail division manager at Washington Federal.
Putting pen to paper makes it more likely we’ll remember our goals. It’s also a good way to review and revise over time, Davis says. “It’s important to sit down and make an assessment on what your success rate is on a regular basis,” she says. “Review your goals often to assess if you’re still on track or do you need to make some revisions in timing and other factors.”
Regardless of age, retirement (or eventual financial freedom) should always be one of your financial goals, says Trevor Wilde, managing director of Wilde Wealth Management Group. Many Americans delay stowing away cash for the golden years, and unfortunately, miss out on years of compound interest that helps even the smallest amounts of money blossom over time.
Wilde recommends aiming to save 10% of your overall income into a retirement savings account (like a 401(k) or IRA). If you can’t hit that goal right away, start where you can and set a schedule (on paper!) to increase your contribution, whether it’s every month, six months or once a year. “If you currently only investing 3 percent, make it a goal to increase your contribution by 2 percent every month until you get to 10 percent,” he says. “It’s far more likely you will sustain and hit your goal.”
MORE ON HERMONEY: Who wants to be a 401(k) Millionaire?
Set non-sexy goals, too
Saving money for the sole purpose of having it on hand in case disaster strikes may not be the most exciting financial goal on your list. But odds are good that in the next decade you’ll get hit with an unexpected expense — a flooded basement, job loss, health crisis or other costly whammy. Having a fully funded emergency fund will save you a ton of heartache and headaches.
Don’t be overwhelmed by the standard advice that you need to set aside enough to cover at least six months of living expenses. Set a reasonable and specific weekly or monthly savings goal to get started. And be sure to put the money in a separate high-yield savings account. “In today’s world; if your emergency reserve is held at your primary bank, more than not, it becomes your overdraft spending account. Your emergency reserve account might need to be one step removed in order to truly be utilized as an emergency reserve,” Wilde says.
MORE ON HERMONEY: Use the HerMoney Guide to Emergency Funds to figure out how much you need, strategic ways to save, the best places to stash your cash.
Set up rewards
The goals you set for the next decade may take a while to achieve. The biggest risk is running out of steam before you get there. That’s where rewards come in.
“While setting goals is an important part of a successful financial plan, make sure you find time to reward yourself and to celebrate when you reach a milestone, big or small, along the way,” says Facet Wealth’s Weiss. Especially those little everyday steps that add up over time.
For example, if one month you have $200 left over from your grocery budget and decide to put it in your emergency fund instead of splurging on a new pair of shoes, that’s a win worth formally acknowledging. Go ahead and buy a bottle of champagne for the occasion! Those small celebratory splurges will help keep you excited about making money decisions that will help you achieve your financial goals.
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