The following is a guest post by Kimberly Palmer, creator of The 2012 Money Planner and author of Generation Earn, available on Etsy. She is also the personal finance columnist at US News & World Report. Take it away, Kimberly!
The new year means a fresh slate—and new money goals for 2012. Whether publicly on a website such as 43things.com or privately in our own heads, many of us are brainstorming for how we can find greater financial success in 2012.
After interviewing dozens of finance gurus, goal experts, and ordinary people trying to get ahead, I’ve learned that one of the most important things you can do to create a richer life is simply to treat that project like any other. Dedicate time to it, define it, break it into smaller steps, and then slowly cross off your to-do list.
Many of us get caught up in that first step—defining just what we want our goals to be. As you brainstorm your own biggest money goals for the new year, here are some prompts to help:
- What does financial freedom mean to you? What does it look and feel like? Does it mean having more time to pursue certain hobbies, the ability to travel, or spend more time with family? Consider creating a vision board with images related to your goals cut out of magazines and catalogues. Keep it in a handy spot so you can remind yourself what you’re working towards.
- What are your financial strengths? Are you good at paying bills on time, or avoiding certain costs? What money decisions are you most proud of, and what were your best purchases last year?
- What about your financial weaknesses? What areas do you want to improve? What mistakes did you make last year, and what purchases do you regret? What’s your biggest financial fear?
- What money lessons did you learn in 2011?
- What’s your longer-term financial vision? Where do you want to be, financially-speaking, in five to ten years? Do you want to be earning a certain amount, living in a home that you own, or be self-employed?
- If you received an unexpected $1,000 with no restrictions on how you could spend it, what would you do with it? Start a business, or pay off debt?
- What would make you feel financially secure? A certain amount in the bank? A certain salary?
If those prompts helped shake loose some latent ideas for 2012 goals, consider writing them down. Do you have any specific savings goals? Earnings goals? Debt-free goals? Next, dissect each big goal. What smaller action steps do you need to take to make them happen? Is there something you can do each week, or even each day? For example, if you want to save more money, perhaps it’s time to change a costly habit, such as ordering take out or taking taxis.
Breaking down those ambitious dreams into bite-size pieces makes them much easier to work towards. Here’s to meeting all your money goals in 2012!