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Paying off student loans, contributing to a Roth IRA, and saving for an emergency are all responsible financial actions. However, they only become true goals when they're tied to something personal. So when setting your money goals, ask yourself: why?
Writer G.E. Miller over at 20SomethingFinance highlights an important point:
It’s a common practice in today’s culture to hear about something beneficial and immediately try to follow suit, often without considering the 'why' behind it. At best, the 'why' becomes a secondary thought... The biggest downside to lacking a clear 'why' is that it severely limits the internal drive to accomplish the goal. When we face obstacles, or even if we don't, the goal was likely too simple. In those tough moments, it’s the 'why' that pushes us to stay motivated, dig deeper, and strive for greater achievements. It helps us regain focus.
I can relate. After clearing my student loan debt, my next financial goal was simply to save money. It felt like the right thing to do, but I didn’t really have a personal reason behind it—other than it being what personal finance advised. The outcome? I didn’t save much, because I lacked a meaningful purpose. Eventually, I discovered my 'why': I wanted to travel. This gave me the drive to live frugally and save much more of my income.
Miller advises working from the end to the beginning. When organizing your finances, 'begin with the why and conclude with the financial goal.' As he explains, this method holds more meaning and is more effective. You can read the full post through the link below.
Photo by Wade M.
