You may have said or heard someone say, "That really drives home what's important." Usually, it closely follows a discussion or revelation of something heartbreaking or life-changing. But does it really drive home what's important, or is it just a cliché we use too easily to make ourselves feel better?
We've had plenty of opportunities over the last couple of years to reflect on what's important in our own lives. I wonder whether that has translated into meaningful change or more focused determination on your part. You may be thinking, "That's a little deep for this 500-word money column." However, a clear focus on your goals, or what I'll call, your "why," can yield big results when it comes to your personal finances. It requires you to take a thoughtful approach by:
1. Identifying your destination. To reiterate, when all is said and done, your desired financial destination is your why. It should be what matters. It may seem a simple thing, but determining what you're trying to accomplish is the first step in getting it done. Imagine building a home with no blueprint of the home you were trying to create. The resulting construction probably would look like the hodgepodge treehouse my friends and I built back in elementary school. If only I had an old photo.
2. Zeroing in on your supporting actions and intermediate objectives. How you're going to get to your goal is your plan. In other words, the steps, or actions, you will need to take. Deciding on spending, investing, saving or paying off debt is crucial and should be part of the plan. Unfortunately, we can't always do everything, and a clear set of priorities and prioritized actions will help guide you. And since it isn't likely to happen in one fell swoop, you might have some waypoints along the route to your ultimate objective(s).
3. Motivating yourself when times are tough. Your "why" lights your fire. To this point in the discussion, it's all flowers and butterflies. We have done the critical, but relatively easy work of identifying our goal and how we are going to make it a reality. If only it was that easy. The spending plan, tough decisions, tradeoffs and discipline required is where the proverbial rubber meets the road. Your "why" should be front and center -- photos, screensavers, vision boards or a crisp, clear picture in your mind -- and provide the umph you need when you are wavering.
4. Creating a rallying point or common purpose. If you're married or in a committed relationship, your why is really a collective agreement. Over the years, I've seen plenty of couples where both parties were not on the same sheet of music when it came to family decisions. That's typically been a recipe for failure and almost always, conflict. Make sure your path is truly a team effort. Yep, teamwork makes the dream work.
5. Building a support network. Accountability partners are a beautiful thing. And that's true, both within your immediate family and throughout your broader network. Friends and family can be a key enabler to progress on the financial front. This could take the form of encouragement, acknowledgement or even full-blown partnership.
If you haven't already, consider taking a close look at your why and ensure you're synchronized and laser-focused on what matters to you and your family.
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