Sunday, April 27, 2008

Biting Off What You Can Chew

In response to my post on creating a downshifting timeline, Jessica, one of my regular readers, listed many of her goals that she wants to achieve before becoming a stay at home mom.  

She's got an aggressive timeline, about 3 years to be financially ready.  Her goals are excellent, but it's a lot to get done in a short period of time.  

My two pieces of advice, as someone who is also biting off, and considering chewing, quite a bit, are:

1.  To not choke yourself on goals in the short term, but keep them lofty in the long term.  For example, if your goal is a downpayment, but you also want to save enough to pay for a car in cash so that you don't have to go into debt for your next vehicle, pick which one of those goals comes first, and save for that.  Then, when you've hit the first goal, start saving for the second.  I tend to try to save for everything all at once, and it always, always dilutes the results.  

Additionally, set your sights on getting one of the smaller goals, such as having a will drawn up, or life insurance, done every other month.  That means you have 60 days, approximately, to find the time to get each of these tasks completed.  I find that sometimes the time-intensive goals get as overwhelming as the financial goals - because I'm busy.  Taking the time to find the best life insurance policy can require a couple hours on the phone or online.  So don't try to do it all, just get one done.  Then move on.

2. Don't be afraid if you miss a goal by some of your target. So maybe you didn't make it to the full $20k you wanted to save for a replacement car, in addition to the house downpayment and building up 6 months worth of expenses.  Maybe you have $15k instead.  That's okay - you still are in a place of choices: you can decide to keep your old car another year, try being a one-car family for a bit, or buy a cheaper car.  Or even decide that owing $5000 is okay.  You may not have made it 100% to your goal, but 75% is still better than nothing.

And one more piece of advice for good luck: 
Life throws out surprises.  Things sometimes happen sooner or later than we plan for them.  Just this past week we had several financial hits we never expected.  They stung, and forced us to rework some plans we'd made.  So be prepared to get derailed occasionally.  

After all, life is what happens when you're making other plans.....



Jessica said...

Thanks, that was helpful. Right now all the effort is on savings for a down-payment. Once we're in a house, then we'll move on to other things. I also should have mentioned that my list was in the order I hope to achieve it in . And I agree, as much as I plan sometimes life is just the way it is, so I gotta learn to work with that. My three year time frame will probably start once we're in a house.

About us... said...

Great advice. I'm an advocate of the thought that if you are adding to your net worth, you are making progress, no matter what your outcome. So true that life happens when you are making other plans!