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Plan Well, Retire Well

Saving and investing your money

Dreaming about the New Year

As we move from one year to the next, it's a time for reflection. I had an amazing year in 2012 with some wonderful highs as well as a few lows. I feel as though now is a good time to take time to thoughtfully think about what I'd like to happen in 2013 as well as years down the road.

Before you jump into New Year resolutions, I invite you to take time and space to dream a little about your future. If we were in a workshop together, I would now give you some delightfully colorful crayons or pens and suggest that you draw a picture of how you'd like your life to look in 3, 5, 10 or more years from now. Unfortunately we aren't in the same room, but I encourage you to find some drawing tools and draw that picture. Even if you don't consider yourself an artist, try it.

In the hustle and bustle of daily life, we rarely have time to dream. Give yourself this gift and dream a little.

Dreaming is important, but let's not stop there. Now, let's turn those dreams into goals (and resolutions). In fact, let's make them SMART goals. Research shows that writing down goals means we're more likely to achieve them, and as you'll see SMART goals are all about helping you achieve your goals. A SMART goal is:

  • Specific
  • Measurable
  • Agreed upon
  • Realistic
  • Timed

Take a look at your picture. What goals do you see from your drawing? Perhaps a goal might be saving money for education costs or a new home. Or, perhaps a goal might be a more positive credit report. In my drawing, I have a file cabinet with financial papers neatly filed and not stuffed full with old papers I don't need anymore; my goal would be to clean out my file cabinet.

I can make my goal more achievable by making it SMART: "I'd like to clean out the four file drawers so that new papers are organized and old, unnecessary papers are thrown out by May 1, 2013." Now my goal is specific and timed. Some goals need agreement from other family members, but this one really doesn't. It's timed (to be done by May 1st) which means I need to clean out one file drawer each month. That seems like a challenging but realistic goal.

My drawing also includes a summer trip. An example of SMART goal for a trip might be: "I will save $750 by June 1, 2013 to take a trip." Now this goal does require agreement with my husband; to save for this trip we need to agree to cut back on other entertainment costs so that we can travel. To check if this is realistic, it helps to calculate how much needs to be saved monthly ($150) as well as weekly (approximately $40). It's easier to decide if it's realistic to save $40 a week than it is to decide if it's realistic to save $750 in five months.

Don't forget to dream for the long-term too. While it's hard to imagine retirement, I do know I'd like to retire financially secure someday. One of my goals in 2013 is to increase my savings rate for retirement. Before I can do that, though, I need to "Calculate how much I can afford to increase my savings by in 2013 and I will do this by January 31, 2013." My next goal is "to complete the paperwork so that my automatic payroll deductions are increased by February 15, 2013." For some dreams, we need to write our goals keeping in mind the different steps it takes to achieve them. Keeping goals very specific helps make them achievable.

Best of luck with writing SMART goals and Happy New Year!

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