Goal Setting's Big Payoff

How to really stick to goals and resolutions

from daveramsey.com on 20 Jul 2009

People who win at anything have written goals. Goals are simply what you are aiming at. Zig Ziglar said, "If you aim at nothing, you will hit it every time."

In terms of success, goal setting has a big payoff. A study of Harvard graduates found that after two years, the 3% who had written goals achieved more financially than the other 97% combined! It doesn't always take an expensive education or the right connections to succeed on a big scale. For most of us, all we need are clear, written goals.

Most people have the best intentions, yet often fail to actually write down the specific money goals they desire to reach. Take the time to determine, in simple terms, your short-term and long-term goals, no matter which Baby Step you are currently on.

Short-Term Goals

Short-term financial goals are things you want to save for or purchase within the next month or next couple of years. For short-term goals, you should make a "Needs and Wants" list. Brainstorm what you need versus what you want. List the items. Then ask yourself three simple questions about each listed item:

If I didn't purchase the item this year, would it make a big difference? If it doesn't, it slides over to the "Wants" list.
If I could only purchase one of these items by saving for it this year, which would I prioritize first? Second? And so on.
How much will each item cost? Total the dollar amount and divide by 12 months.

Long-Term Goals

Take a similar approach with your long-term goals, those which you plan on completing at least three years from now. These types of goals can include debt elimination, retirement, college funding, etc. Many of these goals will most likely be necessities and will need to be factored into your budget no matter what. Keep that in mind when you combine your lists of short- and long-term goals.

Now, decide how many goals you can realistically meet in a certain amount of time. How far down the list can you go without breaking your budget?

Other Goals

While you're at it, why not set goals for other areas of your life as wellfamily, physical, spiritual, social, etc.? You will not be disappointed that you did because all areas of your life have a tie to your money. Focus your intensity on these goals, and you'll definitely be on your way to success this year and one step closer to being debt free and building wealth!

Whatever your financial goals, we have resources to help you.

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You must have written goals! Then look at them and burn them into your brain, don't settle for a mediocre life, set your goals and reach them no matter what. Thanks to Dave, I'm debt free, paid off mortgage, paid of Jeep Cherokee, no CC debt. I save and invest most of my paycheck every week now, can enjoy my paid for vacations whenever I want. I've been on my own since I was 16, life is too short and too tough to go through it as a slave to debt and stupidity. Start using a budget & start using your head instead of your heart with financial responsibilities. Now go get that gold ring!
Chuck January 26 2010 4:35 PM

I took FPU at my home church (Riverbend Baptist in Fulshear, (Near our home in Houston) TX last Spring(2009.) My wife was not in the class with me because she was helping teach the children's hand chimes group during the same time slot. I hope she can take it with me this Spring, but will miss a few classes due to an upcoming surgery. We are still on Baby Step Two due in part to a few setbacks that prove, as Dave teaches,an emergency fund is absolutely essential for everyone. I am now of the opinion that nop one should recieve a high school diploma in the U.S. without having to complete FPU. I only wished someone thought me these concepts much earlier in life. 1. My grandmother passed away last April (2009) at age 94 which neccessitated some expenses including an out-of-state trip. 2. My old car died last August (2009)after 207K. (It had been a good vehicle but had several problems.) I had to finance a good used vehicle, but Thank God we had enough for the required down payment and good credit scores, because lending was very tight in August of 2009. (I will pay this vehicle off as well as our 2005 minivan ASAP. I only bought the 2008 Chevy HHR because I needed reliable transportation (the next morning) for a long commute to work. I hated having to finance it, knowingly going against everything Dave teaches, but I was already in a bind and did not have more time to look for another vehicle. There is a lady at work trying to sell an old beater that I may buy if my mechanic okays it(cash of course)just to own clear and put the commuting miles on. I can just see my wife's reaction now. 3. My wife will have her gallbladder removed this Friday Jan. 15, 2009(please keep Kelley in your prayers) and our out-of-pocket expenses will be about $1050. I thank God every night that my wife and I are both still employed and that our children are healthy. It is also my prayer that everyone looking for work be able to find it soon. Again, the main point of this post is to emphsize the importance of an emergency fund, because Murphy WILL visit. Dave: I hope to see you in Houston Jan 30th if tickets are still available.
harold anderson January 13 2010 11:03 AM

I have two major goals to be accomplished before I retire in 3 years. 1. Pay off the house. I owe $75,000 and have been putting an extra $1000 on the principle every month. 2. Buy a new car just before I retire. It means my 11 year old Dodge will just have to last a few more years. In the meantime I had surgery in Nov and not enough sick leave/vacation time to cover my absence. Did I worry? Not a bit. I have a fully funded emergency fund. Now my challenge is to get through all the medical bills generated by my surgery without touching the fund. What fun!
Laura January 11 2010 4:52 PM

my husband and i have been on the program for 2yrs now. it is amazing. we are now trying to become totally debt free by paying off our house. it seems overwhelming but we know it is possible so we are staying gazelle intense.
stacey b January 06 2010 8:58 PM

My husband and I succeeded in our goal last year 2009 get out of credit card debt! We did Oct 09 and built 1mo e-fund! We wrote down our goals for 2010 then: pay off truck, my student loan, and build 3-6mo e-fund...2010 here we come to being debt free (minus house)!
Amy S January 06 2010 2:52 PM

My husband and I have paid off over $14,000 in the past 19 months and have $4,000 to go until we are debt free which we will do in 2010! My husband was just laid off until spring, but because of Dave's teachings, we were prepared for it and aren't even worried how we are going to pay our bills. We can do it without tapping into our emergency fund and still keep on track in paying off our remaining debt. Thanks Dave!
Kathy December 30 2009 2:53 PM

I reached baby step 7 in September and was excited about the future. Over the past two months, I found myself going backwards (my 3-6 mos. was dwindling). After some soul searching and Dave's timely articles about the personal mission statement and goal setting, I discovered I had fallen off the wagon. I wrote down my mission statement, became obsessively goal oriented, and put myself on a STRICTER budget than before. I added one step, prioritizing my goals and made them 'baby goals'. I am back on track and over the past two weeks I have replenished my emergency fund with the goal of living like no one else by building generational wealth!!!!!
Steve December 30 2009 10:53 AM

Hello!! I need help-- my husband lost his job and my budget is shot. I am already working a part time job to pay off debt. Now I am not sure how we are going to pay regular living expenses, any suggestions.
Bev December 29 2009 1:12 PM

Like Brian, my husband fought the Dave-style changes at first. But when he realized what we could have (more money to do the things we want, for example, since we don't have payments) by doing things this way, he caved. We recently canceled our final credit card after paying it off. Yay! We are now working on the 3 to 6 months living expenses fund. Keep up the baby steps. They work!
Susan Bosch December 28 2009 3:43 PM

I came to your website at the urging of a good friend...I see so many things my wife and I can do to improve our lives. You're the first financial expert who puts it 'right there' in a non-threatening way. We feel like we can do this thanks to you!
Kent James December 28 2009 3:00 PM

Dave, I need your help!!!!! My wife will fight me tooth and nail not to follow your program. she says she only lives once and will not go along with me.
Brian Maruska December 28 2009 11:51 AM

I understand Lucinda. I got money and it burnt a hole in my pocket. I bought a new purse (after telling the hubs no presents for us, only the kids this year). I am taking $100 and putting it towards the emergency fund that was leftover from Christmas, and put my old purse on ebay to sell it and hopefully make back the money I spent on the new one.
Meredith Curry December 28 2009 9:51 AM

We slipped a little during the holidays, but are all set to hit the ground running on the first day of the new decade. We are going to be debt free in 2010!
Lucinda Johnston December 27 2009 8:34 AM