![Photo courtesy of ThisIsIt2 [Flickr]](http://www.thepracticalnerd.com/wp-content/uploads/2010/03/2956432732_84ddb94624.jpg "Photo courtesy of ThisIsIt2 [Flickr]")
I used to run cross country. For seven years, I embarked on 5-10 mile runs. On good days, they wore me out but I had fun. On bad days, I felt like I was dying slowly and painfully.
Races were held weekly in high school. They were 5K races, or 3.1 miles to those of you not familiar with the ol’ metric system. I’d be smack in the middle of it, and I would have no idea where the finish line was. I was so focused on how tired I was that I couldn’t get my head wrapped around where I was in the race. As a result, my performance absolutely sucked. Ask my coach: despite three years in high school cross country, I never really reached my potential. I couldn’t get my head into the psychological aspect of it.
And those of you who are going to respond with “Why didn’t you just run faster?” have never been in a race like that.
When you don’t know where the finish line is, you can’t run the race very well. Financially, you need to be working towards something. If your goal is to just kinda be good with money, you will never make it. Just like if your dieting plan is to lose a bunch of weight, you’ll stay fat forever.
It’s all about making smart goals, and one of them is to make it very, very clear. Here are some examples:
- I want to be debt-free in 3 years.
- I want to retire at age 55 with $1,000,000 in retirement funds.
- I want to save up $30,000 for a down payment on a house.
Now we’re talking! These are goals – and depending on your financial situation, they are clear, attainable ones. Having a clear goal gives you something to focus on. Once all your energy goes toward that goal, great things can happen.
My fiancé and I have so far nailed every goal we’ve set out to attain in the last two months. Now, the big one: paying for our wedding and honeymoon in cash. It’s lofty but achievable. Two and a half months ago, we would have just resolved to keep it as cheap as possible. You know what would have happened? We would have had a $25,000 wedding and financed the crap out of it and would take 5 years to pay it off.
Without any clear direction, you just kinda flounder around. Once we set our financial goals and set out to pay this thing in cash, our financial world shifted a little bit.
It’s the biggest part of any budget – what do you want yours to accomplish?
Tom is an entrepreneur and freelance writer, working out of his apartment full-time, or wherever he feels like taking his laptop. He doesn't take long European vacations or blogs on the beach. He's an Average Joe that took control of his life. He wants you to do the same.
