I was listening to a podcast a few years ago and the host asked listeners to “reflect on your financial goals. What are they?”
Maybe I was in a particularly grumpy mood that day but the snarky response in my head was, “to have enough money. Ugh, I hate that question.”
I was a little annoyed. I was climbing my way out of six-figure student loan debt and really negative about my cash flow. “Money goals” felt like an overused term and I was tired of listening to personal finance experts tell me that I needed to have them.
While I’m a goal setter by nature – and so is Jordan – I couldn’t get enthused over the idea of sterile money goals.
I mean really, how exciting do these sound?
“My goal is to pay off my student loans.”
“My goal is to save up for a down payment on a house.”
“I’d like to contribute more to my retirement this year.”
Those were all technically things I wanted to do, but I wouldn’t put them on the same level as my real life goals. I wanted to get in better shape, start a business, get better at photography, learn to cook, and travel extensively.
Those were goals I could get excited about.
But I couldn’t get excited about paying off my debt or saving for a house.
I soon realized that the way of thinking about money goals felt wrong, at least for me.
(by the way the photography and get in better shape goals? Still waiting on those over here).
Your money = your life
One of the things I struggle most with personal finance is that most everything I read or listen to makes it feel like your money stops at your bank account. Asking what are your “money goals” are makes it feel like your money and your life are two separate entities.
So I would half-heartedly set money goals, focus on them for a week, get discouraged, forget about them, and live my life as usual.
I continued that cycle until one day, a couple of years ago, I was struggling. I’d just left a “big” job (read: a very nice paycheck) after a panic attack from stress.
Money goals weren’t really top of mind. Figuring out my life while I scraped together enough for my student loan payment was.
As I was heading to the gym feeling sorry for myself, I heard a story about someone my age who died tragically in an accident. We’ve all read stories like that, but for some reason, this one struck a deep chord.
It put the world in perspective, if even for a moment, and I found myself asking:
“How do you want to live your life?”
This didn’t immediately relate to money for me. At first, it was more that I didn’t want to go back to the soul-crushing job that I had just left. Then it was that I wanted to be healthier. More organized. A better friend. To enjoy my day more (and to truly mean it when I said that each day was a gift).
I wasn’t making grand long-term plans, which would’ve been too overwhelming to me at that point. I was simply looking at my ideal day and figuring out what that looked like at this point in time.
I began incorporating a morning routine.
I cleaned out my closet.
I started working for myself.
Eventually, I began to imagine a little further into the future and plan out how I wanted to live my life a few years down the road.
I wanted to continue working for myself.
I wanted to have the opportunity to move back home, closer to family.
I wanted to live in a house that was large enough to host family and friends for dinners.
I wanted said house to have a pizza oven (clearly important).
I wanted to hike year-round, go camping, and travel.
I wanted to have flexibility and spend time with the people who mattered most.
By asking myself “how do I want to live my life?” over and over again, I started to dream about what was possible.
Connecting to the dollars
Slowly, money wasn’t a disjointed element that I would make boring goals for and hope they would stick. It was a tool that was going to help me live the life that I wanted to.
They say that the easiest way to know what someone values is to look at their bank account. By thinking about what I wanted – how I really wanted to live – I began to see that reflected in my bank account. No longer was I scraping money together to pay my student loan. I began to pay more than what I needed to.
I became obsessed with spending smarter and only buying the things that made me the happiest. Not because I was sticking to a budget, but because I was really mindful of how I wanted to live my life. Buying the things that made me happiest didn’t mean cutting out the cute shoes or vacations, but it made me more aware of all the dollars that were leaving my bank account.
Some of the money I was happy to see go because I was getting something great in return and it was adding to the life I wanted to live. Other money, I realized, was leaving my bank account and wasn’t bringing me a lot of happiness (I’m looking at you Whole Foods salad bar).
I became hyper-focused on paying off the remainder of my student loans because I knew being debt free would help me navigate the inconsistent income that comes when you start working for yourself.
I started making more because it would enable me to do the things I was excited to do, like travel, pursue work I actually enjoyed, and take that really great yoga class down the street.
Making communication easier
Conversations between Jordan and I shifted drastically. Instead of the usual, “should we buy a house?” conversation, we got back to the basics and started talking about how we wanted to live. While on the surface level I assumed we were always on the same page (save for retirement, save for a house), there was so much we inadvertently left out of the conversation.
We began talking about our ideal day. We would then talk about what we hoped our life would look like a few years down the road.
Our bank account started to grow more and we began putting pen to paper (or numbers to spreadsheet) for these big goals in life. Goals we were excited about. Goals that involved money and our lifestyle. Everything from what car he wanted to get to the next trip we wanted to take, to the house we will someday build.
We purchased a piece of land that may have seemed impulsive or like a poor decision to other people, but that goal came directly from so many conversations of us asking, “how do we want to live?” and then taking the daily action to get there.
This question and these goals still get us out of bed every morning and make us excited to know that we’re choosing to live our life in alignment with these goals.
Do we do this perfectly? Heck no.
We each have those days and make our mistakes with money. That’s one of the reasons I decided to start chronicling goals this year – it’s another form of accountability and it’s a great way to be transparent. Because sometimes we do mess up. But those mistakes don’t detract us from the bigger life goals we have.
The tactics in action
Just because I adopted asking this question rather than sitting down and writing out specific money goals, didn’t mean that I abandoned my spreadsheet loving self. I do love a good spreadsheet.
I’d take my question: “How do I want to live?” then move to, “how much will it take to fund that?”, and then finally, “what am I going to do to get there?”
Big questions + numbers in a spreadsheet helped me to actually enjoy watching myself get to the goals.
You can get the entire process broken down with a spreadsheet to help you put it all together here.
I’ve just written an entire article about how we’ve shifted our focus from strictly money goals to focusing on how we want to live. If you’re living paycheck to paycheck or struggling under a mountain of debt, you’re likely eye-rolling and thinking that there is no way this article relates to you and your situation.
And it might not.
It worked for me to be less bitter about paying off my loans and to pay them off faster. It’s worked to improve communication between Jordan and I. And it’s helped us to (mostly) avoid FOMO because we really do focus on exactly how we want to live.
If setting money goals in the past hasn’t worked for you, asking this question might make a difference. At the very least, it might help change your perspective. It might help you visualize and get excited about what your life could look like. It might change how you make small decisions every day.
And the small, mindless decisions that we make day to day and month to month impact our bank account more than most of us ever realize.
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