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Breaking Big Financial Goals Into Small Tasks

By on October 13, 2011 in Money

Breaking Big Financial Goals Into Small TasksGoals are important for any major endeavor you have in life. Whether you are trying to get out of debt, save for retirement, or lose weight, goals play a critical part in motivating you toward success. But even having an audacious goal can be overwhelming when you first look at it. Saving for retirement takes decades. Paying off a large amount of debt can take years. Saving for a down payment on a home while still paying rent takes a long time. How can we help ourselves reach these big goals?

Set Big Goals

First, set some big goals that will stretch you in order to reach them. There is no sense in setting easy goals that you will complete next week. You won’t be motivated, won’t see a change in your behavior, and most likely won’t accomplish much that will change your life.

Look to set goals for distances of 1 year, 3 years, and 5 years. Your retirement goal will be much further out, and should also be included. Your goals could have to do with paying off one of your debts, paying off all of your debts, and building significant savings for retirement.

Break Goals Down Into Actions

After you have a big goal, break it down into actionable steps. If you look at a 5 year goal to be completely debt free and you are currently $60,000 in debt, you are probably going to be overwhelmed. Instead, break down the goals into some of the following tasks:

Steps You Can Take Today

What can you do in the next 5, 15, or 30 minutes that will significantly impact the goal? Something as simple as getting started writing down all of your debts is a great step in the direction of being debt free.

Steps You Can Take This Month

Next, look at what you could do this month. Maybe it takes longer than 30 minutes and you need time to schedule the next task out. Or maybe you need time to do some research. Instead of just marking it off for sometime this month, set a specific date on a calendar and make sure you complete the task by that time.

Steps You Can Take This Year

There should be a serious of steps that lead up to a year’s worth of work on your financial goal. Tally up all of your daily, weekly, and monthly tasks and track them over a year.

Set Mile Markers of Success

Don’t set a 5 year goal and hopeyou make some sort of progress toward it. Hold yourself accountable by setting up “mile markers” of success. If you want to pay off $60,000 in debt over 5 years, that’s $12,000 per year or $1,000 per month. It might take you a few months to make significant changes that will allow you to save that much money, so maybe your first mile marker is paying off the first $1,000 in debt by the end of month three. Your next mile marker could be paying off $10,000 by the end of the first year.

Set Review Dates

Don’t forget to review your mile markers. It’s great to say you’re going to try and hit certain marks by a certain time, but if you don’t go back and look at what you’ve actually done (or not done) then you have wasted effort. By regularly reviewing your progress toward your goals you will automatically become much more likely to complete them.

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