Your Money_ The Missing Manual - J. D. Roth [14]
Flexible. Your goals will evolve over time. As your priorities change, your goals should, too. This isn't an excuse to abandon a difficult goal or to quit just because you failed to meet it. But if you lose your job, say, you need to be willing to adapt your goals to take your new circumstances into account.
Activity-oriented. Goals that involve doing rather than getting make people happier. Pursuing experiential goals will bring you more fulfillment than obtaining more Stuff.
SMART goals can help you achieve financial success. But setting goals with these three extra attributes can also help you find happiness.
To make sure you achieve your goals, keep these guidelines in mind:
Stay focused. Pursue only a few goals at a time. It's tempting to multitask and work toward many things simultaneously, but you're more likely to succeed if you focus on as few goals as possible. If you try to take on several large goals at once, it's easy to get overwhelmed and lose your way. If you're focusing on debt reduction, just focus on debt reduction—worry about saving for a down payment after you've licked your debt. Do one thing at a time, and do it well.
Automate what you can. One of the most effective ways to increase your odds of success is to take the choice out of your hands. You'll have better luck saving, for example, if you set up an automatic, repeating transfer from your checking account than if you have to remember to do it yourself every month. (To make this even more effective, deposit your income into your savings account and set up automatic transfers to checking.) Automation helps take the stress out of pursuing your goals.
Make it a habit. In Chapter 1, you learned that rituals lead to happiness (Living a Rich Life). Turns out they also help you reach financial goals. If you can't automate your monthly contributions to your savings account, make a ritual out of it: Get in the habit of sitting down and manually transferring the money each payday, for instance.
Break large goals into smaller pieces. A goal like "save a $20,000 down payment for a house by 2014" can be daunting. You'll feel like you're making more progress if you break such long-term goals into sub-goals. So instead of trying to save $20,000 in 4 years, aim for $5,000 per year. It's easier to see progress when you're saving $400 a month toward a $5,000 target than when you're saving $400 a month toward a $20,000 target.
Do something for tomorrow and today. As mentioned earlier, you're more likely to succeed if you focus on just a few goals at once. One way to multitask without becoming overwhelmed is to work on one short-term goal, one mid-term goal, and one long-term goal at the same time. If your long-term goal is to save for a down payment on a house, for example, you might also have a mid-term goal of saving for a holiday in Hawaii, and a short-term goal of asking your boss for a raise.
Review your progress. In the next chapter, you'll learn how to create a budget and track your spending. Doing both of these things helps you see how far you've advanced toward your goals. If you don't keep tabs on where you've been, it's easy to lose track of where you're going.
Be patient. You won't meet your objectives overnight. In fact, it can take years to meet some financial goals, so give it time. Trust the process and believe in yourself.
Ultimately, goals are a means, not an end. It's the process of working toward them that brings happiness—not the actual destination. That's not to say you should set goals you can never meet: You do want to pay off your debt or take that trip to Hawaii. But as you finish one big goal, set another. If you give yourself a series of challenges, you'll be happier and more successful.
Your Money And Your Life: The American Dream
Sabino's family moved to the United States when he was 10 years