If you can plan a trip
you can set and achieve your financial goals
I am writing this after spending the week bopping around Brooklyn, eating a lot of bread, napping and nursing on the subway, and being reminded of the privilege of in-unit laundry. Even though I packed every outfit we own, they were no match for (as one waitress commented) a baby ‘leaking out of every orifice.’
Trips like this (they are not vacations post children), their planning, and their execution are strikingly similar to goal setting. In fact, they are just a fun, dinner-party conversation-worthy goal, while paying off your student loans somehow doesn’t garner quite as much banter. Trips are even a financial goal, as they tend to cost money!
I might argue that every goal is a financial goal. Want to run a half marathon? There’s gear and lodging involved, but also you have to find time to train. Time that could be spent pursuing paid work. Want to eat healthier? Maybe that means more expensive food. It might mean more gorceries and time spent preparing than eating out though and end upsaving you money!
Almost everyone reading this has planned a trip. Maybe it was a road trip to visit your family in Flordia or a once-in-a-lifetime adventure to attend a Taylor Swift concert in Switzerland. Either way, you probably did some planning.
You thought about why you wanted to go to this specific place. What things do you want to do? Why this place over others? Why are you excited about it? We have family in Brooklyn whom we have never been up to visit since they moved there before the pandemic!
You worked backward from where you wanted to go and what you wanted to do. You thought about how you were going to get there, where you were going to stay, and what you were going to do. You picked out a time that was good to go. Planning for our trip, we had the week off, and it worked with our family to visit. I looked at driving, flying, and taking the train. The train ended up being both logistically easier in many ways and cheaper.
You broke it down into smaller steps that you were in control of. You booked tickets, check. You gathered input from stakeholders, check. You sketched out a plan.
You built in some wiggle room. It might rain. Kids might be tired. You want time to add a date night at the corner bar and coffee with an online friend at the last minute.
If you’re like me, you usually go a little overboard and make a document with links and even a map of all the places you plan to visit. It’s fun! Planning is part of the reflection and the decision-making process. It is part of the journey. In fact, people derive satisfaction from planning their trips, sometimes even more than from going on them. My lovely sister-in-law planned and made the majority of this visit happen, and it was nice to share the burden (but also joy) of planning for once!
If you can plan a trip, you can set and achieve financial goals. You can even use the exact same process.
Check that it is the right goal. Interrogate your reasoning behind it. Why do you want to buy a house? Is it just something that you are supposed to do? Do you think it’s a good investment? Are the rental options lacking? A good goal is rooted in inspiration. If you don’t know your goals for your life, start there, not with the financial aspect.
Work backward. You want to have a big wedding in two years. What does that mean? How many people? Where? How much will that cost? Who is paying, and what are their expectations? Put some numbers to it.
Break it down into smaller steps that you are in control of. If you want to buy a new car with cash, you need to save $X per month. What does that mean, and how are you going to do that? What's that going to look like on a day-to-day or weekly basis? Do you need to cut groceries by $30/week? Go out to eat one less time? Cancel a few subscriptions? Or do you need to make a larger change, such as moving to a cheaper apartment?
Leave room for changes. Plan ahead, but plan for the plan to not go according to plan. You cannot know everything and anticipate every cost, especially with kids. There are costs I didn’t know about, and some things don’t matter as much. You want to have funds to buy more clothes as your kids grow faster than expected or to buy the special baby food that is the only thing your baby agrees to eat at daycare.
Remember that planning is part of your life, as is the execution. Balance reaching goals with all the other things. You probably have more than one goal. Timeline it out. What goals do you want to reach in two, ten, or thirty years? How does the amount of saving you need or want to do affect your spending today? What are the tradeoffs? Do they make sense? How much risk are you taking? Do this with a partner if you have one! Share the burden (and the joy) of setting up your financial life.
Life Kit style re-cap:
Ask if this is the right goal to meet your desired outcome. Ask, yourslef why.
Work backwards to understand the full scope of your goal.
Break it down into smaller steps that you are in control of.
Leave room for changes.
Reframe planning. It’s part of the jouney. Enjoy it and share the burden.
How do you optimally reach your goals? Psychologically, there is some evidence that you should focus on one goal at a time. Mathematically, though, there’s not one cut and dry solution. You must add your specific goals to your financial plan and calculate your solution. There is software that does this and aims to keep your everyday spending level over time (or close to it) and plan how much you will need to save/invest to meet your goals.
Want help balancing your goals and creating your financial plan? Reach out or schedule a time to talk in-depth.
