by Carla Michel
With the New Year already seeming a like a distant memory, the resolutions made last month may be fading too. It is easy to come up with a new goal for the year ahead, but how do you stick to keeping it? This has long been a struggle of mine, which I have remedied in order to gain my financial health. No matter how big or small your goals are, I have learned the importance of planning for them and wanted to share some basic tenets that have kept me on track through my journey and successes.
Make a Plan
Three years ago, I resolved to take control of my finances and worked toward being more responsible, knowledgeable and comfortable with money. After I had come up with a plan to tackle what had become piling credit card debt, I was still sticking to it, a year later. As things came together and I had addressed my immediate financial issues, I felt ready for the next step, but what was that?
I hate being asked the question, “where do you see yourself in 5-10 years?” because I am not the type of person to plan or be so specific about things that far off, when I already feel overwhelmed dealing with the “now”. So for the first time in my life, I asked myself that dreaded, canned interview question and that is how I began to make a 5-year financial plan in early 2013. I made a list of objectives. Among my top goals were to be free of my credit card and student loan debt by 30. In order to reach that goal, I had to make smaller milestones to get me there. The thought of paying off all my debt was way too lofty, so I broke it up into pieces. For instance, knowing that my credit card balances are significantly less than my loans and have much higher interest rates, which left me paying so much more than I originally spent, I focused on that first. My short term goal was to pay off my highest interest card by mid-2014. Once paid off, I would reallocate the funds toward my other card, which would be paid off by December 2014. Creating and keeping up with these short-term goals for each year or month would eventually get me to my larger goal; and 1-2 times a year, I check in with myself to see how far along I am. So identify a goal; make a detailed plan to reach your goal within a given period and work towards being consistent and following up.
Reassess and Reevaluate
Also, don’t worry or feel defeated if you are not able reach a goal; just be flexible about changing your plan. When I needed to move to another apartment with rent prices skyrocketing, I had to put more money toward rent (for a while, I was lucky enough to have it be a fairly low expense relative to my income and was able to use that extra cash for debt repayment). I had to re-work my entire budget and reassess my 5-year plan. There was no way I was going to hit my goal by 2018 and it sent me into a panic. However, I realized that my aims were ambitious and it wouldn’t be the end of the world to extend my deadline another year or two. The important thing was that I had not given up and I was persistently moving toward a finish line, which was a huge accomplishment in itself because I start and drop things all the time (ie: my last New Year’s resolution). I’ve learned to recognize those wins especially after sharing setbacks with my money club. I can be hard on myself, so it is wonderful to have a support system that offers valuable input, grounds you and acknowledges what you may overlook.
Plans change all the time, so don’t view it as deterrent; and sometimes, while circumstances may change, you may want to keep to your plan the same. Every now and again, assess if your goals and aspirations still make sense for you, and if so, are you still doing what you need to reach them?
When setting a goal, it should be something you have to strive for. If it’s easy, you probably would have done it already. For me, although I was behind on my credit card goals after moving into a new apartment, I was still working to have them paid off by December 2014 as a stretch goal, or by May 2015 as an absolute deadline. I was able to pick up extra hours at my side job, which I go to very sporadically. While I had to give up my Saturdays, I was grateful for the opportunity to work a few weekends in a row. It still seemed unlikely I was going to hit that target by December, but I knew it would happen. And it eventually did: I was fortunate enough to get a raise and the extra money went toward paying off my debt. I am finally free of credit card debt! Now, the outcomes I hope and plan for don’t come to fruition all the time. However, it is crucial to be ambitious when goal-setting because you will be pleasantly surprised with what you achieve every time, even if it’s not what you initially planned.
While it’s great to have new aspirations, it is also an amazing feeling to remember what you wanted for yourself and witness the sense of accomplishment of working toward and reaching a previous goal. Instead of waiting for a new year or another significant date to start, take the time today to come up with a plan for the goals you’ve already made or are putting off for tomorrow.
Originally from Miami, Carla moved to NYC to pursue her education and a career in the fashion industry. While following her passion for fashion, she also enjoys navigating the ins and outs of personal finance and debt. Her other interests include vegan cooking, studying foreign languages and sewing.