At the beginning of the year, I made four main resolutions, financial and otherwise.
Max out my retirement
Speak up more
Save for a medium-term goal
Of these goals, I achieved one and four. Two and three? Well, I did okay. In reviewing my goals, I realized there were a few goal-setting tips that worked well. But first, here's what didn't work for me.
Writing it down
I suppose this helped with organizing. I created a note called “2014 Goals,” wrote down what I hoped to achieve, and then never really looked at it again. It might have been good for referencing, I guess — but as far as keeping me motivated, it didn't really serve the purpose.
This works for some people; but for me, it just created unnecessary pressure. I proclaimed what my goals would be and then, instead of focusing on them, I worried what other people would think if I didn't achieve those goals. This was distracting.
Again, this probably works well for many people. But I lack confidence, and I'm not one to talk about something before I've actually done it. It makes me nervous. So this method didn't fit well with my personality.
But here's what did work.
Adding action to the goal
Goal #1: Max out my retirement — It was a good start, but there was no solution in that goal. So I tweaked it a bit to focus on how I would make it happen and decided to make my resolution a little more actionable.
To max out my retirement, I needed to contribute about $450 each month to my IRA. To make that happen, I dedicated one particular client, whose payments were always around this amount, to pay for this goal. Instead of “max out retirement,” my goal became, “Pitch to Client X once a month, use payments for retirement savings.” That's a much more concrete goal with a built-in, actionable routine. I did the same thing with Goal #4, my resolution to save for a medium-term goal.
Let's say you have a similar goal, but you are not a freelancer. Here are a few ways you might create a more actionable resolution:
Use all bonuses for retirement savings
Use all windfalls for retirement savings
Get rid of [insert expense here] and use savings for goal
Increase automatic 401(k) contribution (Hell, do this once and you're done!)
Of course, it all depends on your situation and your routine. But you get the idea.
Reconsidering the goal
It's not surprising that I didn't do so well with Goals #2 or #3. They're vague.
“Consume less.” What does that even mean? It could mean spend less on clothes, dine out less, stop buying household junk. And because it was so vague, it was also easy to justify my spending and disregard the goal. I convinced myself that stress-fueled spending didn't fall under consumption. When I bought take-out every day for a week because I was too busy to cook dinner, I told myself I was doing it out of desperation, not the desire to consume.
And that may very well be true, but it doesn't matter. The point was, it derailed my goal. Later in the year, I reconsidered and tweaked that resolution. I took a moment to stop and think about my consumption triggers. What made me spend — a specific emotion? a particular store? I answered the question and created an updated resolution from there. I realized my problem wasn't related so much to materialism as it was to stress, which led to bad decision-making. So I created new resolutions: Stop working more than ten hours a day; take mental breaks; don't take on more work than I can handle. I also came up with a plan to safeguard against my desperation spending: I cooked meals in advance; I kept back-up meals on hand in the freezer.
Again, Goal #3 was really vague: Speak up more. When did I need to speak up? And under what circumstances? I had to answer these questions to create a specific resolution. In my case, I was specifically afraid to ask for raises. I was also afraid to let a client know if they were asking too much (that's part of freelancing, it happens). They'd ask something of me, I'd say yes, knowing it would take me twice as long to finish a project. Then, I'd get upset with them — but it wasn't their fault! How were they to know something took so long if I didn't tell them? These were specific issues I dealt with due to my fear of speaking up. So I changed my resolution.
Instead, my goal became, “Don't be afraid to ask for rate increases” and “Tell the client when an added task will take longer than an hour to complete.” Those are much more specific than “speak up.”
Of course, this is simply what worked for me, and your goal-setting methods may vary depending on your personality. But there are some general methods that work well for most everyone. Being specific about goals and working them into your routine can help make them more actionable, and I think that works well for most of us — but again, it is important to do what works for you.
It was a good year; but I had to learn what worked well in terms of keeping my resolutions and what didn't. Now, as I prepare for 2015, I know that actionable goals work better for me. What didn't work for you in 2014? How did you get back on track?