Looking back, one of my biggest regrets (as it relates to personal finance) is that I never really thought about what I wanted my life to look like when I reached financial independence. Honestly, I never really thought specifically about achieving financial independence until I was already there.

My focus was always on growing my earnings while controlling my expenses and then saving and investing the excess. In practice, this is a totally reasonable formula. 

The problem was I never answered the “Now what?” question.

I’m a bit of a micro-manager by nature (actually quite a bit!), so the month-to-month savings and investing year after year worked perfectly fine for me. Looking at my life from a macro-standpoint never really entered my mind. 

I spent my time practicing my faith, leading my family, and of course, working. These are all great things, obviously. But I never spent time wrestling with the “Now what?”. I never thought about how I’d want to spend my time.  I didn’t consider what ministries or volunteer activities I’d like to participate in. Starting a little side “business” that would be a real passion project was not pondered.

Sadly, I just never thought about it….I only executed a plan. It’s like I planned a great trip to get to an exclusive island resort, but never thought about what I wanted to do when I got there. Or even why I wanted to go there to begin with.

I now have the time to explore different possibilities and I’m doing so! But how much better would financial independence be if I was living out a dream I had been planning to enjoy for years?

I greatly enjoy my opportunities to coach others with their personal finances. While we still talk about the numbers and forms and processes and procedures, I’m trying to emphasize the importance of setting financial goals and dreams upfront.

Often families are so consumed by the problems in their current financial condition that their hopes and dreams for the future aren’t a priority. I understand that feeling.  I made many financial mistakes early in my career and it took some time just to get back to break even.

If you find yourself in a financial forest fire, certainly focus your efforts on putting out the flames. But don’t stop with simply executing the plan to get out of debt and start building wealth! Think about where you want to go and why.  Talk to your spouse if you’re married.

Dream a Little and You May Be Surprised About Where You End Up!

One other great benefit of understanding your goals and dreams is that by defining them, you’re building your defenses against impulse spending. 

We can easily trip up our long-term goals with short-term impulse thinking. One of the reasons it’s so easy to impulse spend is that you have nothing to compare it to.

Imagine this scenario (I won’t have to imagine it because something very similar happened to me!):  You’re young, starting your career, finally making what seems like a lot of money, but you haven’t given any thought to long-term financial goals and dreams.

You’re standing at the car dealership looking at a brand new car you’ve always wanted. The salesman is whispering in your ear what a great deal this car is (“….if you act right now!”) and how the low, low payment can easily fit into your monthly expenses. Your only thought is, “Where do I sign?

But suppose you had thought about your financial goals and dreams first. If you had, you probably wouldn’t be at the dealership to begin with!  But if you were there, your thought process changes from, “How much are the payments?” and “Where do I sign?” to “How far will this purchase back up my dream___________?” 

Do you see the difference and how powerful it can be to compare the car to a lost (or deferred) dream?

Maybe you can stand up bravely to the new car smell, but there are many forms of financial kryptonite out there to tempt us: a new house or expensive remodeling job, a vacation home, a new boat, or a suite of furniture…

Understanding the delay in achieving important financial goals can be just the motivation you need to avoid a damaging impulse buy!

How to Set Financial Goals

If you don’t take the time to define your financial goals, how will you achieve them?

A few points to keep in mind as you’re working on defining your financial goals and dreams:

  • I recommend setting some long-term goals (think 20, 30 years out) and some short-term goals, too. It can be tough to maintain motivation for a goal that will take 30 years to achieve, so give yourself some shorter term dreams and goals to keep you motivated and excited.
  • Remember you are NOT chiseling them in stone like the Ten Commandments; you’re writing them with a pencil that has an eraser on one end!  Over time your goals and dreams may change and most likely will.  That’s perfectly fine!  The important thing is that you still have a set of objectives you’re working towards.
  • If you’re married, do this exercise with your spouse! Think how much closer and stronger your marriage will be if you’re working together toward shared goals.
  • Don’t get hung up in the numbers at this point! The focus is just on where you’d like to be in the future.

Read more: So how can we set financial goals and actually achieve them? One proven answer is to set S.M.A.R.T. financial goals.

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