Saturday, November 17, 2012

Making Things Happen

It doesn't matter if you are trying to get out of debt, into shape, better prepared or whatever. There is a pretty solid formula for being successful. That is what we are going to talk about today.

Step 0: Be realistic. Choose goals that are practical for your situation in terms of money, effort and time commitments. A super doomsday bunker is not going to happen on a part time service industry type job. Losing 50 pounds in a month is not healthy. Somebody with a full time job and kids that is going to school part time cannot have the same pursuits and hobbies as a retiree.

Step 1: Clearly define your goal. Figure out where you want to go, how you want to get there and when you want to arrive. Remember that a goal without a timeline is a wish. The point is to have a quantifiable goal as well as the enabling goal that will help you get there. Here is a simple example

Goal: Pay off $X,XXX in consumer debt by summer (July 1 to toss out a date) 2013.
Enabling goal: Live on 65% of take home income putting 15% of total take home into retirement savings and the remaining 20% towards consumer debt. Put 75% of any found money towards consumer debt.

Pretty obviously the amount of money you can put towards said debt multiplied by the period you plan to pay it off in must equal the total balance. So if you owe 3k and can put $500 into it a month it is going to take 6 months not including interest.

Step 2: Prioritize your goals above less important things. If you spend like normal and wait till the end of the pay period to put money towards your goals little if anything will happen. On the other hand if you write that check first then by default you will figure out how to live on what is left.

The same could be said about time. If you put off a weeks worth of stuff to Sunday after dinner when you really want to just relax then watch The Walking Dead is not a good plan. Hitting the gym on the way home is a lot more likely to actually work.

Step 3: Continual assessment. If you are not making progress for whatever reason then things may need to be changed. Also situations can require a change. If you are hurt or have a significant unplanned expense like a large car repair it may mean adjusting or postponing some goals.

Step 4: Periodic goal review. Continual assessment is good but the squeaky wheel gets the grease. Stopping and taking an hour or maybe an afternoon to look at everything is smart. Maybe you do yearly goals like I have in the past. It is smart to sit down and really look at all of your goals and how they are going at a regular interval. Quarterly might not be a bad idea though for other projects monthly may be better.

You might not follow all of these steps exactly but most successful people seem to hit the high points. If what you are doing works then stick with it. However if you find that goals are sticking around instead of being passed then think about changing.

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