Friday, August 13, 2010
By Anne Bachrach
You've been making choices every day since you were a child, yet sometimes it can feel like you are the most inexperienced decision-maker in the world. You feel uncertain about which choice to make and how your decision will ultimately affect your life. When faced with a decision that could alter the course of your life, how do you make the right choice?
The first step in any choice is to determine where you want to be. Getting clear on your goals will help you make choices that are in line with your vision. Once you get clear on your goals, it can be much easier to see how the results of your choices will lead you either closer to your goals - or further away.
Here's how you can learn to make the right choice in three simple steps.
Step 1: Write Your List of Long-Term Goals
You may have more than long-term goals, but for now, just start with the five most important to you. Once you have had time to focus on this short list, feel free to expand it to include all of your long-term goals.
Here's an example:
My Long-Term Goals
1. Have $7,500 saved to take two vacations per year (starting 2014) to exotic places by 6/1/13.
2. Sell house by 9/30/2013
3. Buy new house with 15% down payment $90,000 by 10/1/2013
4. Pay off mortgage ($_______) by 12/31/2030
5. $2.2 million saved for retirement by 12/31/2021
6. Retire by age 54: 2/23/2022
7. Donate 5% of net income each year to charitable organizations that have personal meaning (Susan G. Komen Foundation and Habitat for Humanity) starting 1/1/2012
8. Complete a full Ironman Triathlon in under 17 hours - 10/31/2013
9. Play golf 2 times per month starting 4/1/2011
10. Improve health and fitness-lose 25 pounds, and be at180 lbs by 7/1/2011
11. Read fun books 1 per quarter starting 1/1/2011
12. Get 1 massage per month starting 1/1/2011
My Long-Term Goals
Now that you have identified your long-term goals, you can identify your short-term goals. Don't over-analyze or critique your answers, just go with what you really want now, today, tomorrow, this week, within one month, or in the near future.
Step 2: Write Your List of Short-Term Goals
Here's an example:
My Short-Term Goals (Must be measurable, specific and include specific dates)
1. Reduce monthly expenses by 10% - now! 1/10/10
2. Take that 10% and open an interest bearing account for annual travel fund - within 2 days: 1/12/10
3. Research mortgage refinance every 6 months - can I save $$? 3/31/10
4. Find a local art gallery that will sell my paintings - 6/12/10
5. Establish passive income (sell digital images of my artwork at the local gallery, do consulting, etc.) to increase my retirement fund contribution to $25,000 per year - 4/12/10
6. Do cardio exercise 3 times per week for 1 hour each time beginning today
7. Lift weights 2 times per week for 45 minutes each time beginning today
8. Play golf 1 time per month starting 5/1/2010
9. Improve health and fitness-lose 12 pounds, and be at193 lbs by 8/1/2010
10. Get 1 massage per quarter starting 6/1/2010
11. Have date night with significant other 2 times per month starting today
My Short-Term Goals
How did you do? Did your goals come to you easily or did it take more time than you thought? If your goals rolled off the end of your pen like flowing ink, that's good - you're pretty clear about what you want in life. If it was a little difficult coming up with goals, spend some time exploring what you really want - what you want, not what someone else wants for you.
If friends or family criticizing you for any of your goal choices, reply politely with "I appreciate your feedback. This is something I desire deeply and want to do for me and my happiness." If they understand, they'll be able to relate to your desire to be happy - because we all want that. And if they don't - well, they don't. Let it go and don't spend any more energy trying to get them to understand.
Step 3: Make Sure Your Short-Term Goals Support Your Long-Term Goals
Review your short-term goals and determine if they support or sabotage your long-term goals. As an example, let's use Goal #5 from the Long-Term Goal List: $2.2 million saved in retirement fund.
Let's say the current balance in your retirement fund is $50,000 and you can only contribute $10,000 per year. At that rate, it would take you more years than you have to reach $2.2 million!
Wait, don't panic yet - the goal of $2.2 million by your target date is completely achievable, you just need to make sure your Short-Term Goals support it and you have done your math correctly. Take a look at Goal #5 from the Short-Term Goal List. As you can see, it addresses the issue of the lack of retirement fund contribution. Contributing $25,000 per year will result in $375,000 in fifteen years - that's a great improvement! While there is still an opportunity to create more cash, this is a great short-term goal!
What would be a poor Short-Term Goal that is not in alignment with Long-Term Goal #4? How about a $20,000 gambling trip to Las Vegas, spending $50,000 on a new car, buying a $40,000 watch....you get the point.
Do you see how you can easily make the right choice when you know where you want to be? The key is to get crystal-clear on your Long-Term Goals and then create Short-Term Goals that support your long-term vision. Obviously, these were just examples and your goals may differ greatly. There is no right or wrong to the types of goals you have - just go with what you really want - and make choices that support the achievement of those goals.
Schedule time on your calendar to add, modify, delete, or update your long-term and short-term goals. You may want to do this monthly to measure your progress toward your goals and course correct if you need to so you have the highest probability of achieving the goals you have set. Consider how the choices you make each day, week and month impact the achievement of your goals.