I have mentioned in the past that I really like Trent from The Simple Dollar. So when he devoted a whole month of posts to fixing finances, I decided I’ve got to try it out.Â I might not be the target audience for this plan.Â I believe my finances are in good order (maybe I’ll find they are not).Â I write and read about personal finance daily, so there might not be a lot for me to learn.
I’m curious to find out what will work for me and what won’t.Â The first thing that won’t work for me is “taking out a sheet of paper.” I’m a digital guy, so I’ll use Notepad or Excel when I can. In this post we’ll cover days 1-3 or “Stage 1: Figuring Out Your Goals And Values.”
The goal for today is to come up with 5 values important to me. I came really close to skipping this step. I like to finances analytically and it’s a stretch for me to see the importance of this step. I’ll play along, I can’t start out refusing the first step. When I read this, I thought of my overall goal, to be free to do some of the things I love. So the first and foremost value is Freedom. Here are the others I came up with: Love, Friends, Family, and Happiness.
Today I take the values from Day 1 and translate them into goals. Trent comes up with some 25 year goals and some one year goals.
25 Year goals
- Like Trent, I want to be able to pay for a significant part of my child(ren)’s college education. We don’t have kids at this time.
- Like Trent, I would like to be able travel the world with my wife. This is easy so far, isn’t it?
- I want to be able to pursue work that is interesting to me. If it was today, I’d like to analyze trends for the New England Patriots.
- I’d like to not have to worry about money to any of the above.
1 Year goals – I set my goals at the end of last year.
This is the day that we put a timeline behind each of the goals of yesterday. I’m supposed to put a timeline behind each short term goal. Looking at each of my goals, they are things that are done throughout the year. Maxing out my retirement plans isn’t something that I plan in advance, I set it once and it just happens through the year. The big one that I haven’t made any progress on is the company I want to start. I’ve been a little too busy with my day job and this website. It’s all I can handle at this point.
For each of the long term goals, they are all far in the future. The big one I can get started on now would be learning everything I can about football so that I can work for the Patriots. Energi Gal can attest that I watch enough games. I think I’m pretty knowledgeable, but I don’t know the language that’s used inside the huddle or specifics of what goes on during the week in game planning.
Before I did this exercise, I often found that, even though I often realized it wasn’t a good idea to spend, I would still spend money anyway. Why? I didn’t have any sort of concrete plan for what to do with my money, especially not one that was larger than saving for a new gadget or toy. Now, whenever I’m tempted to spend money in a frivolous way, I think about what’s important to me, and it directly connects to a plan for spending my money.
I can’t say that this has been a problem for me. I have some toys, but they are well planned and budgetted and fit well with my income.
Overall this stage doesn’t jump out and grab me.Â It seems as if the plan is to set the stage for motivation.Â I’m probably the exception, but I don’t need a lot of motivation.