KEY TAKEAWAY: The purpose of your financial goals is to support your life goals. So, identify the financial goals that support what is most meaningful for you to feel and have in your life, quantifying and prioritizing them to you have a target to work toward. Scroll down to the TAKE ACTION section for this week’s actionable steps.

The driving and guiding force behind anything we do is our WHY, the reason we are taking action in the first place. It is the feeling we are trying to get to. In fact, that is what goals are: Feelings we want to achieve.¹

Goals are feelings we want to achieve.¹

Think about it. Consider things you have striven for in your life—goals you have achieved. What was important about them? Was it the what of the goal that mattered or how it made you feel?

For example, if you went for a college education, was it the piece of paper that was important or feeling that you had more options for your life and the opportunity to pursue a career of your choice? If you pursued a job, was it the job itself or that it made you feel financially secure, a sense of purpose, needed, or fulfilled?

You can probably reflect on previous goals and the feeling tethered to each goal.

That is true with all goals, including financial goals. When it comes to our money, our financial goals support our life goals because our financial situation influences our ability to achieve how we want to feel in different areas of our life.

We started our journey with you thinking about how you want to feel in different areas of your life, and as part of that, you put your stake in the ground by identifying goals that would support more of those feelings you want to achieve.

So let me ask you this:

Did you put your stake in the ground when it came to your finances, too?

In other words, did you consider how your financial situation affects how you feel in different areas of your life and identify the financial goals that would support more of how you would like to feel?

This is important because money plays a significant role in our life, whether we like it or not. Our financial situation impacts almost every facet of it in one way or another. Where we live, what we do, how we live, our ability to care for ourselves and our loved ones, as well as the opportunities we have to engage in the fulfilling life experiences that we want for ourselves and our loved ones – all are influenced by our financial situation.

So, how do you feel when it comes to your financial situation, and how does that impact how you feel in different areas of your life?

And, if that is different from how you would like to feel, what do you want to change about your financial situation to support more of how you would like to feel?

IDENTIFY THE FINANCIAL GOALS THAT SUPPORT WHAT YOU WANT IN YOUR LIFE

Take a step back and think about what is most important to you. What do you value most? Consider the goals you set for yourself earlier in this journey. How do your finances support that (or not)? How could they support that better?

For example, would you like to feel more fulfilled in your work—perhaps by learning new skills or pursuing a different career direction?

Would you like to buy a home and feel that you and your family are more settled and putting down roots in a community?

Do you want to feel you can retire earlier if you so desire?

Do you want to make sure you don’t outlive your money or have funds to leave your children when you die?

Also, when it comes to your finances, think about what you want to feel more (or less) of.

For example, would you like to feel less stressed about money or feel more financially stable? Maybe you wish to stop living paycheck to paycheck or have more of a financial buffer so you’re less worried about unexpected financial events that may arise that you can’t pay for.

Do you want to feel that you have more options in your life? Maybe you’d like to have more funds of your own to feel more financially empowered to make your own financial decisions and do as you like?

Would you like to feel able to do more of what brings you or your loved ones joy? Maybe you want to pay for your child’s education, have money to travel and be more adventurous, or feel able to start a business that you’ve always dreamed about?

As you identify your financial goals, think about what problem you are solving, what financial situation you are addressing, or what financial condition you are achieving that would help you achieve more or less of how you want to feel.

Ask yourself the following questions:

• What life goals do I need money to help me achieve?
• How well does my financial situation support my different life goals—how I want to feel in different areas of my life?
• If my financial situation does not support my life goals, what would? What would I like to feel more (or less) of in my life when it comes to my finances?

Write down your answers.

PRIORITIZE YOUR GOALS

Most of us don’t have unlimited resources to work with, so we need to decide which goals we want to focus our funds. So, do that now. After you list your financial goals, prioritize them. Which of your goals are most important to start working on first?

As you prioritize your goals, there are a few financial goals that I want to mention. While these aren’t the sexiest goals—they’re not saving for a fun event like a wedding or retirement—they are part of what supports having greater peace of mind because they protect you, your livelihood, your assets, and your dependents if you have them.

• Rainy Day Fund: Also referred to as an Emergency Fund, these are savings that provide a financial buffer just in case. A Rainy Day Fund helps you avoid having to scramble financially to come up with money or use credit cards to cover unexpected financial events, such as a broken down car or medical bill or insurance deductible. How much you need depends on your situation, although 3-6 months worth of living expenses is a general rule of thumb. If that seems out of reach, set a target that does seem doable and build from there.
• Insurance: Insurance is part of your risk management strategy. Types of insurance include life insurance, health insurance, disability insurance, long-term care insurance, homeowners/condo/renters insurance, automobile insurance and liability insurance (personal and professional). So, what insurance do you need to protect you from the risk of loss?

For example, if you have dependents, you may want life insurance to ensure their care if something were to happen to you. You may want disability insurance to protect your income if you cannot work due to an injury or illness. If you have a home, personal property if you rent, or a car, then you need to have the appropriate insurance in place. And, of course, there is also health insurance which is important to ensure you not only take care of your health but also avoid the financial burden that an uncovered health event can cause.

• Estate Planning Documents: Death is not a comfortable topic for any of us, but it is a given. Therefore, prepare for this eventuality and help your loved ones minimize the pain of your loss by putting your estate in order.

A Last Will & Testament tells the legal system how you want to dispose of your property if you die, including guardianship for any dependents you may have. If you die without this, the legal system will decide according to your state’s intestacy laws.

A Health POA (Power of Attorney) gives someone else of your choosing authority to act on your behalf regarding health decisions if you cannot do so.

A Living Will gives instructions for medical professionals to follow if something happens to you and you cannot communicate with your healthcare providers.

A Financial or Property POA gives someone else of your choosing authority to act on your behalf relating to your finances if you are unable to do so.

QUANTIFY YOUR GOALS

After identifying and prioritizing your goals, quantify each so that you have a clear financial direction to understand what actions you need to take to achieve them. The amounts you come up with may change over time as your goals evolve, life happens, or your circumstances change. However, getting to where you want to go is difficult if you haven’t set a specific enough goal to work toward.

So, looking at your different goals, how much do you need to fund each?

To help you quantify the amount of money you think you will need to fund each goal, do the following:

• Get clear on your vision for your goal. What’s involved? For example, if you want to save for a home, what size and location? What kind of maintenance or renovation costs might be required? What about other costs, such as homeowners insurance or property taxes?
• Establish a timeframe. What is the timing of your goal? When do you want to achieve it?
• Tally up your total. Set a target for the total amount of money you’ll need to fund your goal. How much will you save monthly to achieve it by your desired time frame?

As you do this, take advantage of the many online and offline resources you can use to help you.

For example, you can check out online marketplaces and companies to get prices for automobiles, real estate, and insurance. You can contact local professionals for estimates, such as insurance agents for insurance, realtors for real estate, and banks for mortgage rates. You can look at online legal services and call local lawyers for quotes for estate planning services. Free online calculators are also available to help quantify various goals, such as retirement, college education, and home purchase.

Review your different goals and use the available resources, both digital and human, to help you quantify and set your financial direction for each one.

ADJUST AS YOU GO

Your financial goals—like any of your goals—are not set in stone. They can change as you live your life and your circumstances and goals evolve. However, get started working toward them by putting your financial stake in the ground so you know what to work toward. Then, as you go, move that stake as is warranted by changing circumstances, needs, and desires.

And if you are in a relationship, I strongly encourage you to speak with your partner to define your collective goals. You’ll be more successful in both a personal and financial relationship when you create a shared vision and work together to achieve it. So, if you haven’t yet, start talking with your partner about the financial goals that support your shared life goals.

TAKE ACTION:

Set your financial direction that supports the life direction you want by defining your financial Why.

1. Identify the financial goals that support how you want to feel in different areas of your life. If you’re in a financial partnership, talk with your partner and set your collective goals together.
2. Prioritize Your Goals: Think about what makes each goal meaningful to you, and identify the order of importance of your goals.
3. Quantify Your Goals: Quantify your goals to help you determine what actions you need to take and when to achieve your goals by your desired time frame.

References:

1: Hartley, Anne (2000). Love The Life You Live: Ten Steps For Happier Living; A Life Coaching Process. Hart Publishing Pty Ltd. Australia.

IMPORTANT: The information provided is for educational and informational purposes only. It is not intended to be a substitute for professional advice, diagnosis, or treatment. Always seek the advice of a qualified professional with any questions you may have regarding the topics discussed here as the topics discussed are based on general principles and may not be applicable to every individual.