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Budget Blog

How a budget goal can transform your life

6/29/2021

 
by Brad Hoffer, www.xlyourfinances.com
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Recently, my wife and I set a goal to hike the Grand Canyon, rim to rim.  Our friends think it’s a great idea while our family is convinced we are crazy.  Before you get  too concerned about our safety, know that we are going with a group that has done the hike dozens of times and has strict guidelines we have to follow to ensure we are “ready”. 
Planning for this hike has been unlike anything we have ever done before.  This one goal has completely transformed how we approach almost everything related to our health and fitness.  To begin, our weekend hikes have gotten much more serious.  Some of these trails we have been on before, however, in the past, after about a mile of hiking we would turn-around because we knew we had a mile to get back home.  Knowing that we need to be ready to go 7.5 miles/4,714 feet down into the canyon and then turn around and do 9.9 miles/ 4,314 feet back up, we have suddenly started getting more serious about our exercise, our eating and especially how far we go on hikes.  We went for a 5 mile hike and it turned into 7 miles due to taking some wrong turns on the trail.  In the past this might have been a huge frustration that we went further than we planned.  Now we were happy about it because we know it is preparing us for the Grand Canyon.  It is amazing how quick your perspective can change based on setting a goal!

It is interesting that the only thing that has changed was now we had a challenge to overcome.  This alone has triggered all kinds of actions and changes that we never would have even attempted without it.  You can have the same amazing transformation to your finances simply by setting a goal.  The key is it needs to be something challenging.  Saving up for a vacation is a good goal and can give you something to work towards, but probably won't "transform" your financial habits.  Some big goals to consider could be paying off your mortgage in half the time, buying an investment property, choosing an amount you want to give to your kids for college, saving for adoption, starting a business etc.  The key to this working is it needs to be big and at the same time it needs to be something you really want to accomplish.
Once you come up with the what, you need to then determine the how and how much.  This is where you need to know where your money is going and start making a plan on what you could change.  You might determine that you need to find other streams of income to get where you want to go.  Again, this is something you might never consider otherwise, but now that you have a challenge in front of you, you will be surprised at what you come up with.
If you don’t challenge yourself, you will most likely stay where you are at.  There may be nothing wrong with staying, but if you are not satisfied with your current situation, a goal may be the motivation you need to change it.
To better understand why this works, let's take a look at the research that has been done on goal setting theory.  The following are extracts from an article I found on goal setting theory from www.positivepsychology.com.   

“The following findings summarize the last 90 years of goal-setting:
  • 92% of New Year resolutions fail by the 15th of January;
  • People who write their goals are more likely to achieve their goal than those who don’t by 50%;
  • Motivation experts agree that goals should be written down, and carried with oneself, if possible;
  • Carefully outlined goals, which can be measured and set within specific timeframes, are more effective;
  • Explaining your goals to someone you are close to, or making the commitment public, substantially increases your chances of reaching your goal;
  • By contrast, goals that are kept to oneself are more likely to be mixed up with the 1,500 thoughts that the average person experiences by the minute;
  • Often, achieving a goal means sacrificing something or putting aside certain habits, or beliefs about yourself–it may even result in an emotional or physical toll;
  • Harvard research documents that 83% of the population of the United States do not have goals.
  • Goal-setting typically yields a success rate of 90%;
  • Goals have an energizing function. The higher the goal, the greater the effort invested (Locke & Latham, 2002).
  • You need to set positive goals, not negative:  Research shows that punitive strategies often result in anxiety, a lower persistence, and performance, especially in comparison with goals that are set with a positive outlook (Roney, Higgins, & Shah, 1995).
  • Frese et al. (1991) have developed the concept of “error management,” which intends to reframe errors during the process as opportunities for the individual to learn from.
  • Framing mistakes and negative feedback with statements such as “Errors are a natural part of the learning process!” and “The more errors you make, the more you learn!” (Heslin, Carson and VandeWalle, 2008) are beneficial.
  • In short, discouraging fear-based environments encourages people to try again, rather than give up on their goals. This ‘forgiving’ aspect also enables individuals to expect, and not apprehend, failure as part of the growth process.
  • Goal-setting is not a straight-forward path to success, and it is important to feel like one can “fail” and still aim for their goal, maybe with added specificity.
  • People like a challenge, especially when it seems difficult but possible.
  • So far, we have seen what goals do, but we have omitted to mention what happens to people when they do not set goals in their lives.
  • Indecision, lack of focus, boredom, and not having something specific to strive for, can lead to a feeling that one is living a dulled, less meaningful version of their life. Symptoms of depression, among other mental health struggles, often appear in these perceived unchanging spaces.
  • This is because specifically-written goals can provide individuals with a sense of existential structure, purpose, and meaning."
https://positivepsychology.com/goal-setting-theory/

In summary, when you set a goal for yourself, make sure it is positive, let others know about it, write it down, set a timeframe, be ready to make some sacrifices to achieve it, have a growth mindset, view setbacks as learning opportunities and don’t be afraid to make the goal big, but achievable.

I look forward to letting you know how our hike across the Grand Canyon goes. In the meantime, get started today with your own goal and watch it transform your life.


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    Author

    I have been an Auditor, Analyst, Accounting Manager, Business Systems Manager, Controller, School Board Vice President, Director of Finance, CFO and COO over the past 2 decades of work experience. In my free time I developed the XLYourFinances spreadsheet and website I enjoy golf and spending time with my family.  We attend church at LCBC.

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  • Home
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