Money Musings: 💭 A surprising thing about money goals
Money might seem more like math than art. A dollar is a dollar and a goal often reflects saving up (or investing) a certain number of dollars.
Yet, I’ve found money is far more of an art than a science. And treating it that way can make our lives a lot less stressful.
Most of our financial goals include some unknowns. Maybe we are saving for a trip and we’re not sure how much the flights will be or even which dates we’ll need the money by.
Or for longer-term goals like retirement, we have no idea how long we’ll live (i.e. how long we need the money to last) or what things will cost when we retire.
Part of being a financial adult is feeling confident in our plans, knowing they will happen. But this doesn’t mean we need to know how much we need for each goal down to the cent.
There are far too many unknowns AND our preferences and situation change along the way.
In my interview with Kiersten and Julien Saunders of rich & REGULAR they shared that they look at goals more like a guiding “North Star.” They were talking about financial independence or retirement specifically but this can apply to all of our financial goals.
Our goals can be more of a guiding North Star than an absolute number.
This applies to how much we save or invest for the goal but it also means the goal isn’t binary. We don’t achieve the goal 100% or fail. There is a scale of success along the way.
Getting to 90% of your goal might be a tremendous achievement. Getting most of the way or even part of the way is much better than not making progress towards it at all. You know… “shoot for the moon and you’ll fall among the stars” or whatever the saying is.
Viewing goals as more of a North Star rather than a definitive number was a game changer for me.
Not only in being flexible as things change but also in having some grace for my progress along the way.
MONEY MOVE OF THE WEEK
SET ASIDE MONEY TO LEARN TO INVEST.
Compound interest makes investing critical to building wealth. It’s a beautiful thing! Our interest earns interest and the results are exponential. Yes, please.
Our retirement accounts are a great place to start investing. This might be through a company 401(k) or an IRA (Individual Retirement Account). It’s a way to get comfortable researching funds and experience what it’s like to live through the market movements.
Before we start investing a large part of our savings outside of our retirement accounts, we want to have some important boxes checked:
Have a minimum rainy-day fund
Be maxing out our 401(k) matching
Have paid off high interest credit card debt
We want to invest money we won’t need in the short-term. Now, if you don’t have these boxes checked, that’s okay. You can set aside a certain amount of money (can be as little as $5) to learn to invest.
We learn by doing. This can be a really fun way to practice and get educated so that when you do have those boxes checked, you can hit the ground running.
P.S. Read chapters 7 and 8 of Financial Adulting for everything you need to know to start investing confidently and consciously!
YOU GOTTA SEE THIS
ARE YOU A FINANCIAL ADULT?
Take the quiz to find out. ICYMI, we have a fun (and free) 12-question quiz that tells you where you are on your financial adulting journey. In the results I also share some tips to help you level up your financial adulthood depending on where you land.