I wish there were a specific plan that can work for all. Or a formula that can match everyone to a customized plan. Do you know those tests you take and, based on your score, they put you in a category? That would make life so much easier. Unfortunately, that’s not how it works.
There is good news: you can craft your plan and it as unique and specific as you want. You know you better than anyone (except God).
You all have heard of SMART GOAL framework that allows you to set goals. It’s a great framework that I use in my way (with a few twists).
S-Specific
M-Measurable
A-Attainable
R-Realistic
T-Time-Based
Specific yes, BUT also Unique
What do you want to achieve? It could be the money you want to save before retirement; it could be the house you want to pay off, it could be the travel you want to do, it could be the freedom you want to have. Think long term. You can always break it down into smaller steps as needed.
Let’s say you want to save $1,000 (short-term). Do you want to set this as your emergency fund because Dave Ramsey says so, or do you feel that’s the right amount for your emergency fund? Depending on where you live, that might be too much or not enough.
Measurable yes, BUT also Categorized
How much does your dream life cost? There is a price tag associated with your dream based on your lifestyle, where you want to live, or your hubbies. Being able to quantify what you desire makes it more tangible and easy to work toward it. You can go a step farther and create categories for different needs: financial, spiritual, physical, etc. You want to make sure all (if not most) areas of your life are covered. We are trying to be well-rounded, balanced people!
Attainable yes, BUT also Motivating
What can you do to reach your goals? Here you look at two things: (1) is there something that can help you achieve the goal but you are not doing, and (2) why haven’t you done it. If you don’t know what you can do, it’s time to brainstorm some ideas. Don’t equate attainable to easy. You have to work for your goals; otherwise, your goals are too small. That’s where motivation comes in. You can be motivated out of necessity or out of passion; they both work!
Realistic yes, BUT also Bigger
First, get real with your current situation. Depending on how far or close you are to your dream, you need to work harder or little. Do you have debts? Do you have a job/steady income? You can’t skip from 1 to 100. Your expectations need to match reality. But I don’t want you to sell yourself short! If you can save $1,000, you can save $10,000. And just because you have not seen it yet, doesn’t mean it doesn’t exist or is impossible. Broaden your horizon, look beyond your family/ town to get inspired to reach for the stars.
Time-Based yes, BUT also Flexible
How long are you giving yourself to achieve your dream? Be flexible but not f-l-e-x-i-b-l-e.
The goal to have a short timeframe to inspire you enough to get going but not too short that it’s stressing you out. Some of us want to see some results to keep us motivated. So what if you don’t achieve your goal in the timeframe you gave yourself. You are at least closer than you were when you started. Just don’t give up!
Set it up…
Now, you are all set with goals to include in your “perfect” financial plan. There is no perfect plan. There is no right plan for everyone. Go with a plan that works for you, and you can stick to it.
“You can always amend a big plan, but you can never expand a little one. I don’t believe in little plans. I believe in plans big enough to meet a situation which we can’t possibly foresee now.” ― Harry S. Truman
