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The Value of Dreaming Before Setting Financial Goals

January 29, 2018
AUTHOR: Emilie
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If you want to know how to get there, you need to first decide where you’re going.

I know this seems obvious. There are tons of cliches out there that essentially say this same thing.

  • Without your why, you can’t have a way.
  • The GPS won’t show your where to go without you putting in the destination.

That’s why when someone says to me “I want to be better with money,” I often ask “Why?”

For a long time, my “why” has been being debt-free. I have seen the burden debt has been to my family and felt it myself. I spent more time than I care to admit at a job where my boss repeatedly called me “stupid” because it was well-paying. While I wouldn’t suggest anyone putting up with that, it was tolerable for me because it was a well-paying opportunity that got me towards goals that I cared more about.

Now that debt freedom is in sight (ish), I am starting to dream of what comes next- paying off the house, paying for our wedding in cash, starting to max out our retirement accounts. These, though, are all steps towards a general life of financial betterment and, while they’re great goals, they’re not really great whys. Before you set your money goals for the rest of this year, take a minute to dream about where you want your life to be. That dream will be your why.

Start by Deciding Where You Want to End Up

One thing I like to dream about is our forever home. Whenever C is out of the Army we’ll settle down and spend the rest of forever living someplace finishing out our lives. Now, there are a million unknowns about our forever home: how far from now is it? What state do we want to settle in? Do we have kids? Grandkids? The questions could be paralyzing!

Here’s the secret: Don’t worry about them! Right now, we’re not planning, we’re just dreaming! You don’t need to have all the details to dream. I don’t know what state our forever home will be in or how many bedrooms are involved, but I do know it will have a wrap around porch.

When I think about my some day (in the distant future) family, I want to be able to send my kids to the college of their dreams without being worried about the cost- and without burdening them with student loans.

Being clear on what you want to be able to do or where you want to be in the future allows to you to pinpoint what you’re working towards. Now that you have your final destination, you can figure out what it takes to get there.

Figure Out All the Possible Ways to Get There

There is no one right way to go about your financial journey. Okay, let me say that one more time just in case it wasn’t clear, there is no one right way to go about your financial journey. Life is not a one-size-fits-all situation, and one plan most certainly does not fit all. While I have some suggestions on how to budget and where to get started investing, you do you.

Really, before deciding on a plan, you want to lay out ALL of your options. Do you want to start contributing to retirement now? Do you want to wait until you hit some goal? What about that vacation you’ve been wanting? How does that fit into these plans?

The goal here is not to create a plan but instead lay out all of the possible plans that are going to take you from where you are now to the end goal you laid out for yourself.

Pick the Best Plan For You

Which plan gives you the most freedom to do the things you want to do while also bringing you steadily towards your goals? As I shared in my January debt update, I paid of over $17K of debt in 2017. I also spent six weeks abroad in four different countries and traveled over a dozen other times. I certainly was not “gazelle intense.”

Find the plan that works for you. Run the numbers to be sure it’s what is best, given your actual needs. Don’t let unrealistic scenarios (“I’m never going to eat out again!”) keep you from actually making progress. Be realistic, give yourself a little wiggle room, and pick whatever best suits you and your family’s needs.

Remember that planning is a constant situation. What suits your right now might not be what is best for you in six months. It’s okay to change your plan, as long as you’re changing your plans intentionally and not just going with the flow.

Putting it all together.

I mentioned above some of the dreams that C and I have for ourselves. We dream of a large forever home with a wrap around porch and a second-floor master bedroom with a balcony. We dream of sending future children to college without the burden of the cost. We dream of our own little rental real estate empire that will support us well into our retirement dreams. These dreams for my why. I want to better my financial situation because I want to be able to make these dreams happen for us.

For us, the path to making these dreams happen includes becoming totally debt-free, maxing out any retirement matches, and ma,king the fiscally responsible (not always the fun) decision.

We laid out a four-part financial goal this year:

  • Pay off my ECSI (Student) Loan
  • Pay off my car loan
  • Max out Casey’s TSP Match
  • Cash flow our wedding
  • Get Casey’s Cow Loan below 10K

Do you see how these goals are all steps to get us closer to our dreams? Being rid of our loans will free up more money for us to invest. Cash flowing our wedding will keep us from being crazy-spendy about the whole day. These might seem small, but much like interest these decisions compound.

Many people say things like “I should make a budget because adults have budgets.” Unless that’s immediately followded by “and I want to be an adult” there’s no motivation in that statement and, most likely, that person would fail at keeping their budget!

When you know where you are trying to go, it’s much easier to say no to the detours (like the new cars). I could have used my car accident as the opportunity to upgrade to a newer, more expensive, shinier car, but 1. I really don’t care about cars and 2. I knew that making progress on my debt this year was more important to me! It might be cliche, but it’s true: Knowing your why will keep you on your way.

What are some of the dreams guiding your financial goals this year?

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Emilie is a data engineer by day and lifestyle blogger by night. A Jersey girl at heart, she is currently living in her fifth home in three years, Savannah, GA with her college sweetheart. She’s learned the hard way that home is wherever the Army sends them. She enjoys eating food, cuddling with her dog, and binge watching HGTV.