4 Financial Goal-Setting Myths - Debunked!
The road to living the financial life of your dreams isn't always smooth. It's filled with surprise potholes and unexpected detours. A loss in income or large emergency expense can weaken your resolve and possibly stall your financial dreams for a time. And believing certain money myths might cause your dreams to break down altogether.
It's the myths related to goal-setting that can do the most damage. So, to ensure you can stay the course and achieve your money goals in the new year, let's put those myths about financial goal setting to rest.
Myth #1: Life becomes boring when you set financial goals.
It's true that setting goals means redefining your priorities — but it doesn't mean you can't enjoy life along the way. Reaching aggressive goals require earning extra income or eliminating some expenses. If you feel your motivation fading, ease up on your savings timeline. That little bit of relief can leave more money in your budget so you can enjoy daily life a little more.
Scheduling small rewards at regular intervals can also make the road to goal achievement more enjoyable. For example, you might reward yourself with a meal from your favorite restaurant for every $500 you save.
Myth #2: If you miss an age-related savings target, you'll never achieve your retirement goals.
Basing your savings benchmarks on your age, income level, and goals can help you stay on track toward the retirement of your dreams. But sometimes, life happens. An event like a sizeable medical expense can deplete your emergency savings and make it necessary to adjust your monthly budget.
If you miss a saving target, don't throw in the towel. You can still reach your goal. Depending on your retirement investment accounts, you could make additional contributions. 401(k) annual catch-up contributions could be an option. Another option is to adjust your savings goal or timeline — or both. There are going to be financial surprises as you work toward your long-term goals. The key is to remain flexible, explore your options, and determine the right choice for your situation.
Myth #3: You can achieve your financial goals just fine without writing them down.
There's a reason experts recommend writing down your goals — studies show you're more likely to achieve them when they get out of your head and into the real world. It might be because writing down your goals forces you to get clear on your intentions. Written goals are more than vague fantasies about the future. They have the power to define what you want, your timeline, and how you'll get it. Set yourself up for success by putting your goals in writing and posting them where you can view them daily.
Myth #4: The economy dictates how well you do financially, not goal setting.
Financial goal setting can help you stay on track toward your goals despite uncontrollable changes in the economy. You may need to adjust your strategy or target dates due to economic fluctuations that happen. But that doesn't mean you have to abandon your goals. During tough economic times, remaining flexible means you can still make progress toward your goals. It's the consistency of your new financial habits that will help you cross the finish line.
The above myths are exactly that — myths. Dismiss them. Change the way you think about your money to make it easier to get back on track, even if you need to make a detour along the road to your financial goals.