Wednesday, July 23, 2014

The Power Of Goals

Saving for anything can be difficult. It's hard to stay focused when all you can see of the goal is a hazy image months or years in the future that looks unattainable right now. interim goals. Sure, you have a long term goal, but to stay motivated, you should have many small goals on the way to that larger goal. If your goal is to save up enough money to buy a car in two years, it might be difficult to put away that money each month or each week. The ultimate finish line is so far off, there is a great temptation to cheat and not put away some money right now. But if you make smaller goals, say like saving a certain amount each month, or having a savings balance of x dollars in two months, you'll be more likely to succeed. Those intermediate goals provide you with the frequent sense of accomplishment you need to keep going.

I've got a degree in electrical engineering. I spent five years* being taught to analyze problems in a logical manner and come up with a path to a solution in discrete, small steps. I love checklists. I get a big sense of accomplishment working through a list and knocking out the items one by one.

*I took a tad longer to get my degree than normal - my first years in college were pretty fun.

So it makes sense that I also love goals. I'm finding I really love asset allocation as well.

I also love Fridays. It just so happens that my wife and I get our paychecks on alternate Fridays and because I'm the one that handles the finances in our household, that means every Friday I get to take a fresh batch of money and dole it out amongst our bills, savings, and investment accounts.

Oh, and I also like Fridays because they're the start of the weekend. But mainly that first thing.

I know getting the money for my Tesla is going to take years. I need to stay motivated (or motorvated, if you're into puns or motorin', if you're into Night Ranger). To that end, my computer wallpaper is the first image in the slide show on the home page of this blog. I routinely read websites and stories of Tesla owners to keep the fire burnin'. My monthly goal update posts provide another motivation. But I'm looking for one more motivation. Right now, I'm thinking of that Percent Of Goal number on my goal progress page. A good monthly goal would be to increase that by 1% each month.

I'm not sure about this though. First, that's a tough goal to reach. That would require saving over $1,000 a month, which would impact other things I am saving for. It also provides a quick way to determine how much longer I have to save - one percent equals one month. While this may be good later on, right now, at 95% remaining, it's somewhat depressing. That's almost 8 years. I'd like to reach my goal way before that. (Truthfully, I probably will, thanks to compound interest, but still...)

So I don't know what another good interim goal might be. Any suggestions?


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