2905: Turn off Autopilot & Set Financial Goals by Chelsea of Smart Money Mamas on Personal Finances

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[00:01:06] [SPEAKER_00]: This is Optimal Finance Daily. Turn off autopilot and set financial goals.

[00:01:12] [SPEAKER_00]: By Chelsea of smartmoneymamas.com

[00:01:15] [SPEAKER_00]: And I'm your host and personal finance enthusiast, Diana Merriam.

[00:01:19] [SPEAKER_00]: Now let's get right to today's post and start optimizing your life.

[00:01:27] [SPEAKER_00]: Turn off autopilot and set financial goals.

[00:01:31] [SPEAKER_00]: By Chelsea of smartmoneymamas.com

[00:01:35] [SPEAKER_00]: To start you off on the right foot, en route to financial health, you will set some real financial goals.

[00:01:42] [SPEAKER_00]: These will focus your journey and motivate you to keep going.

[00:01:46] [SPEAKER_00]: This is possibly the most important step of the process, because it will involve having real, personal conversations, both internally and with your spouse, about money.

[00:01:58] [SPEAKER_00]: If your history in discussing money has been filled with argument, guilt, or blame, don't despair.

[00:02:05] [SPEAKER_00]: Start this journey with us on the right foot by changing the stage for your conversation with your spouse or significant other.

[00:02:13] [SPEAKER_00]: Make a nice meal or drop the kids off at the grandparents for a night.

[00:02:17] [SPEAKER_00]: Make the time relaxed and focus the conversation on how much better the whole family will feel when you're controlling your money, not the other way around.

[00:02:36] [SPEAKER_00]: Gaining control of our money often feels like such a difficult feat that it overwhelms us.

[00:02:42] [SPEAKER_00]: We know things could be better, but the jargon and confusion pushes us to ignore it.

[00:02:48] [SPEAKER_00]: All too often, it isn't until we arrive at a financial crossroads that we get the push we need to make the necessary changes.

[00:02:57] [SPEAKER_00]: This adds untold stress to families and relationships when a little work up front could have led to smoother sailing over time.

[00:03:07] [SPEAKER_00]: So, what should you do?

[00:03:09] [SPEAKER_00]: Turn off autopilot and steer towards a real goal.

[00:03:14] [SPEAKER_00]: We all arrive at this journey in different ways and with different notions of what will make it successful.

[00:03:20] [SPEAKER_00]: You can't start the journey without knowing where you want to go.

[00:03:23] [SPEAKER_00]: So, take a quiet moment and write down your goals.

[00:03:27] [SPEAKER_00]: Decide what things cause you the most stress and set a goal to fix them.

[00:03:32] [SPEAKER_00]: Feel free to write down as many goals as you would like and prioritize them.

[00:03:37] [SPEAKER_00]: Just be sure to keep them realistic.

[00:03:40] [SPEAKER_00]: Do you want to keep better track of your spending?

[00:03:42] [SPEAKER_00]: Achieve financial independence?

[00:03:44] [SPEAKER_00]: Buy a house?

[00:03:46] [SPEAKER_00]: Save for a car?

[00:03:47] [SPEAKER_00]: Pay off one credit card?

[00:03:48] [SPEAKER_00]: Not buy one piece of children's clothing for a month?

[00:03:52] [SPEAKER_00]: That last one probably doesn't count as realistic.

[00:03:56] [SPEAKER_00]: Key goal-setting considerations

[00:03:59] [SPEAKER_00]: Dealing with a spouse

[00:04:01] [SPEAKER_00]: If you have a significant other, I highly recommend doing this goal-setting session together.

[00:04:07] [SPEAKER_00]: If there are two main spenders in the house, there need to be two main planners.

[00:04:12] [SPEAKER_00]: I cannot stress this enough.

[00:04:15] [SPEAKER_00]: Undergoing this journey on your own will only be frustrating, and setting your family goals and trying to dictate them to your spouse isn't going to give them the warm and fuzzies.

[00:04:25] [SPEAKER_00]: If you and your spouse have different financial habits, this conversation may have to be multi-stage.

[00:04:33] [SPEAKER_00]: Share each person's views of your priorities without judgment.

[00:04:37] [SPEAKER_00]: Then come back together to discuss how you can compromise to a common goal.

[00:04:41] [SPEAKER_00]: The first step in becoming a stronger and more financially successful couple is to stop making money a taboo subject in your relationship.

[00:04:51] [SPEAKER_00]: Staggered goals

[00:04:53] [SPEAKER_00]: I'm a big fan of staggered goals.

[00:04:56] [SPEAKER_00]: Set a one-month goal you feel you can achieve, a six-month goal, and a longer-term goal.

[00:05:03] [SPEAKER_00]: As you achieve your goals, don't forget to celebrate your successes and congratulate your family on work well done.

[00:05:10] [SPEAKER_00]: I'm not saying go on a major spending splurge, but go out for ice cream, make a special meal, or whatever makes your family feel appreciated and will reinvigorate them to keep up with their newfound financial habits.

[00:05:24] [SPEAKER_00]: A Necessary Starting Foundation

[00:05:27] [SPEAKER_00]: To set yourself up for true financial health, you should ensure you have a strong foundation.

[00:05:32] [SPEAKER_00]: A strong foundation includes a responsible emergency fund, a debt-free life, and consistent retirement savings.

[00:05:40] [SPEAKER_00]: That doesn't mean you should shy away from discretionary goals like that trip to Disney or Taylor Swift tickets for your daughter.

[00:05:48] [SPEAKER_00]: But if your family doesn't have these three core things, they should be your biggest priority.

[00:05:55] [SPEAKER_00]: Taylor Swift will be so much more enjoyable if you aren't worried about the credit card bills for six months after the concert.

[00:06:03] [SPEAKER_00]: Goal setting and emotional money baggage

[00:06:06] [SPEAKER_00]: As you think through your goals, try to be honest with yourself about why you're writing down each item.

[00:06:12] [SPEAKER_00]: If you want to be able to afford a new luxury car because cars are your passion and you love the feeling it gives you while you drive, then great.

[00:06:21] [SPEAKER_00]: If you want a new luxury car because you're the only one in your neighborhood without one, it might be time to think again.

[00:06:28] [SPEAKER_00]: You may stick out as the only one driving a reasonably priced car today, but it also may mean you retire five years earlier than your neighbor.

[00:06:38] [SPEAKER_00]: They'll be driving to work in that fancy car while you put your feet up at the pool.

[00:06:44] [SPEAKER_00]: Here are some common early financial goals.

[00:06:47] [SPEAKER_00]: Pay off one credit card.

[00:06:50] [SPEAKER_00]: Pay off student loans.

[00:06:52] [SPEAKER_00]: Build a three-month emergency fund.

[00:06:55] [SPEAKER_00]: Save 15% of pre-tax income for retirement.

[00:07:00] [SPEAKER_00]: Create and maintain a budget.

[00:07:03] [SPEAKER_00]: Eliminate three non-core expenses.

[00:07:06] [SPEAKER_00]: And create a new income stream.

[00:07:09] [SPEAKER_00]: Good luck with this first step.

[00:07:11] [SPEAKER_00]: What is your biggest financial goal?

[00:07:14] [SPEAKER_00]: What is a good short-term goal to get you started?

[00:07:20] [SPEAKER_00]: You just listened to the post titled,

[00:07:23] [SPEAKER_00]: Turn off autopilot and set financial goals.

[00:07:26] [SPEAKER_00]: By Chelsea of smartmoneymamas.com.

[00:07:29] [SPEAKER_00]: And I'll be right back with my commentary.

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[00:08:35] [SPEAKER_00]: I've found that the way I was monitoring my money, budgeting, and setting financial goals when I was single

[00:08:41] [SPEAKER_00]: needed to completely change when I joined forces with my Midwestern gentlemen.

[00:08:47] [SPEAKER_00]: In the past, it was just me, my dog, my house, and one stable income.

[00:08:51] [SPEAKER_00]: Now, we have two adults, three pets, a child we have half the time, a house, one stable income,

[00:08:59] [SPEAKER_00]: and another income that varies greatly.

[00:09:02] [SPEAKER_00]: With more variables at play, more unanticipated expenses come up,

[00:09:07] [SPEAKER_00]: and there are simply more factors that need to be considered with planning.

[00:09:11] [SPEAKER_00]: So there's more room for error when budgeting.

[00:09:14] [SPEAKER_00]: This was actually the beginning of the end of budgeting for me.

[00:09:19] [SPEAKER_00]: I was getting extremely frustrated over how difficult it became

[00:09:24] [SPEAKER_00]: to apply my simple budgeting tactics to a much more complex situation.

[00:09:30] [SPEAKER_00]: And for what?

[00:09:32] [SPEAKER_00]: We were spending well below our means.

[00:09:34] [SPEAKER_00]: We fully fund our retirement accounts every year.

[00:09:37] [SPEAKER_00]: We don't have any high-interest consumer debt.

[00:09:40] [SPEAKER_00]: And it dawned on us that we don't have any financial goals that require the level of monitoring,

[00:09:47] [SPEAKER_00]: diligence, and budgeting that I had become used to.

[00:09:51] [SPEAKER_00]: While I agree with tracking spending to get a general sense of what we spend each year,

[00:09:56] [SPEAKER_00]: I'm not sure I need to get as granular with budgeting as I did when I was digging out of debt.

[00:10:02] [SPEAKER_00]: I share this to demonstrate that it's possible to go on autopilot even with good financial habits.

[00:10:09] [SPEAKER_00]: Sometimes you have to recalibrate and question if your routines really make sense.

[00:10:16] [SPEAKER_00]: But that'll do it for today.

[00:10:17] [SPEAKER_00]: Thank you for listening.

[00:10:18] [SPEAKER_00]: Have a great rest of your day.

[00:10:20] [SPEAKER_00]: And I'll see you tomorrow where your optimal life awaits.