For 2019, Do This With Your Goals

We’re closing in on the end of 2018, and starting a new year soon. As you look back on your accomplishments, and failures, of the past year, you’re likely thinking of what you’ll resolve to do in 2019.

As you think of those resolutions, or goals (as I prefer to call them), I’d like you to do one thing.

Avoid making a mistake I’ve made before.

Make your goals dependent on things you control.

Turning Your Dreams Into Goals

When the clock strikes midnight and we look to a new year ahead, we see a fresh start to work towards our dreams.

Sometimes those dreams are something long term, like sending our toddlers to college. Maybe they’re short term, like getting a new job or launching a side hustle in the coming year. Perhaps you want to become a millionaire, go back to school and get a degree, buy a home, or retire early from the workforce.

Achieving our dreams are often out of our control. Sometimes, people realize this and so give up on their dreams before they even start. Or they “do everything right”, still don’t achieve what they dreamed, and throw in the proverbial towel.

That’s why, instead of focusing on our dreams, we should turn them into SMART goals instead. We make an actionable plan to achieve those goals. The plan is based on things we can control, and can be adjusted over time as needed.

Even if you’re a fan of BHAG (Big, Hairy, Audacious Goals) you’ll still have a better chance at hitting them if you break them into steps you can control.

SMART Goals

People often talk about making SMART Goals. SMART, in this case, is an acronym for:

• Specific
• Measurable
• Achievable
• Relevant, and
• Time-bound

Why? Because having a fuzzy dream feels nice, but you can’t take steps toward achieving the dream without a specific plan.

You don’t want your dream to remain a dream. You want it to turn into your new reality, right?

So let’s explore how to turn that fuzzy dream into a plan.

Start With The Dream

I’ll use one of my own dreams as an example – saving for college for my three boys. My oldest son was born, as some of you know, only two months after I finished college myself. Having worked full time and going to school full time, starting in community college and transferring to a four-year school, I managed to graduate debt free with a BS in Accounting with high honors.

When he was born, that experience was fresh in my mind. I knew I wanted to help him go to college one day. I didn’t have a lot of money – my husband and I combined brought in under $50k. I worked full time during the day and he started working part-time nights and weekends, so we could avoid childcare.

It would have been easy to dismiss that dream as something impossible for a 23-year-old mom on a low income. But instead, I turned that dream into a series of goals. Over the past fifteen years, that dream has shifted from a fuzzy, feel-good picture in my mind into a series of steps to get closer to a specific end.

Turning My Dream Into Smaller Goals

The specific goals to help achieve that dream have looked different in different years.

Let’s talk about the first step. It was saving up enough money to open a Vanguard 529 account.

I had read all about how starting early and saving often could help you save for college. So I decided to start putting small amounts of money aside for that dream. I scrimped and saved until I had the $3,000 required to open a Vanguard fund.

That was a proud day for me. $3,000 was almost 10% of my income back then.

The $3,000 goal was specific. It was measurable – I either had the $3,000 or I didn’t. It was achievable, although not easy. It was certainly relevant to me. And it was time-bound, because I wanted to open an account while he was still small.

Only then would it have time to grow and compound over many years.

Each year since, I’ve made smaller specific goals to continue to take steps towards this dream. That might look like contributing a certain amount each month towards college. It may be taking a lump sum, like a bonus or tax refund, and putting it into 529 plans.

Avoiding The “Out Of Control” Trap

There are a number of things I can’t control about the college savings process, and likely things out of your control for your own dreams:

• I can’t control or predict what school, major, or aptitude my children will end up with. As the mom of an older teen, I’ve seen first hand just how much kids change over time.
• I can’t control market performance. This is why I find it’s best to focus my goals on the contributions I can make, rather than on ending account value. I’ve made this mistake in past years and been disappointed when the markets don’t lift my account value up.
• I can’t control what school costs. The cost of college has outpaced inflation by a tremendous margin since my son was born in 2003.
• I can’t control what external aid my kids are going to be offered – if any. When my son was first born, I thought I could possibly count on grants one day because of our low income. That’s changed over the years, and I’m glad that aid will go to a child who needs it. Scholarships are a wild card and hard to predict until your kids are close to heading to college. Non-need based aid is another area where I don’t know what, if anything, they’ll be offered.

Knowing that a big part of your goals or dreams is out of your control can be paralyzing – or liberating. Rather than dewlling on the many things I can’t control, I focus on what I can control. Over time, doing this has allowed that fuzzy dream to turn into a more concrete goal.

• I can control how much I contribute. Barring emergencies where I have to stop college savings, like when my husband nearly died of septic shock almost seven years ago.
• I can control what I invest in, and how much risk I take. I can take less risk by using something like iBonds, with a guaranteed return but lower rate of return. I can take more risk and try to boost my return, accepting the risk of loss.
• I can control what about college I’ll fund. I often read about ridiculous levels of tuition (usually at private colleges) for degrees that get low paying jobs. I get to decide if that’s something I’m willing to pay for. I also control whether I’m willing to pay all of the cost, a certain portion like 50%, specific expenses but not others (also called, am I funding their beer), and so on. This is something I think about a lot – I have no desire to turn my kids into entitled, spoiled boys.
• I can control how I help my kids outside of just paying money. There are many ways we parents can help our children with college, that don’t involve us paying a dime. How many young adults have you seen who wish their parents had helped them better prepare for the financial side of college? Or that their parents counselled them about the pros and cons of debt? I can do that. I can help research scholarships. I can research schools, and the real expected cost of attendance, together with my kids.

Putting my focus on what I can control, rather than dwelling on all the things I can’t, has helped me to take a number of small steps over a long period of time towards this dream.

We’ll see in two and a half more years how well this has worked.

Do This With Your Own Goals – A Guide

Take those dreams and turn them into actionable goals within your control.

First you take some time to dream. Write down what you want to achieve, and by when. Do you want to own a home in five years? Go back to school next year? Retire in ten years? Buy a second home? No judgement here, your dreams are your dreams.

Take one dream – just one – and start breaking it down. Brainstorm ideas for concrete steps you can take towards that dream. If you want to buy a home, for example, steps could include things like:

• Researching homes to determine your budget
• Figuring out how long it will take to save a down payment
• Pull your credit reports and credit score
• Interviewing realtors

And other steps.

Once you’ve got your steps to achieving your goal, set a time for them. Maybe you’ll do one thing a week, or a month. Perhaps you’ll set up some of your financial goals on autopilot, having the amount you need deducted from your paycheck automatically. Do the same thing with your other dreams. And refine those dreams until they become something you can control.

Final Thoughts On Control

There are, of course, things that happen in life that are totally outside our control. These can derail everything.

I’m thinking specifically of things like when my husband got sick and almost died when I was 32 and he was 37. Every single last goal I had before that flew out the window, and the only goal became survival. Or my friend Dad, Dollars, Debts, who lost his home in a fire over a year ago.

In the case of our family, during that time we stopped saving for college. Stopped contributing to retirement above the match. And just focused on health, getting better, and making it financially to the next month without bouncing checks.

None of us is in full control over every aspect of our lives. Unexpected things will happen. Life is messy and complicated.

When I talk about making goals you can control, I’m really talking about not making goals that fully depend on external factors beyond your control.

It’s fine to have dreams that depend on a combination of our own actions, and lucky breaks. But you don’t control the lucky breaks any more than you control the unlucky ones. So focus on what you can control, and take charge of achieving your goals this new year.

I hope some of you will share your dreams, goals, and steps you’re taking to make them come true in the comments! And I hope you all have a wonderful new year.