How to set goals is a question that is asked constantly. It’s a great question to ask because goal setting is one of the most important steps to becoming successful. Setting goals for yourself gives you a chance to outline all the things you need to do to get where you want to be. It’s like a road map to all the dreams you’ve ever had about achieving more. We’ve all heard either “ask a stupid question, get a stupid answer” or on the more positive side of things “as a great question to get a great answer”. Setting goals works the same way. If you set a big goal you will achieve big dreams.Now you may be asking “what is goal setting and how am I supposed to be doing it?” Well to start the goal setting definition is the process of identifying something you want and setting up measurable goals and timeframes to to achieve what you originally wanted.This sounds simple enough but it can be difficult depending on what you dream about achieving. Here are some goal settings examples that you may have heard of before.
Become a millionaire
Be self employed
Spend more time with friends and family
Vacation more often
Retire early
Buy a new house
Buy a nice car
In reality the list can go on forever. If we were going to list out everything we want in life it would take us a lifetime of writing and we still wouldn’t finish. Now you can see there are different types of goal setting too. Not everyone wants to run a business, move to a new house, or become the next Bill Gates. That’s where we get into the different types of goals to set and how to set them.
How to set what kind of goal?
Now you may be wondering what kind of goal should I be setting? The answer is it depends. If ask a million different people how many types of goals there are you will get a million different answers. Short term goals, long term goals, personal goals, professional, artistic, financial, relationship… I think you see what I mean by a million different answers. What you need to remember is a goal should have 3 main characteristics. First goals should have time limits because it creates urgency. Second they should be attainable because if it’s not possible you won’t do it. Third goals should have a specific topic because you need to know what you’re working on. Now with that in mind we need to talk about how to set goals and achieve them. There are many different methods to goal setting. Everyone should try different goal setting methods until they find one that works for them. I’ve found that the most empowering goal setting methods are SMART goals, picking The ONE Thing, or using the 10x Rule. These methods will all have different steps to set goals but they will all have the 3 main characteristics of a goal.
SMART Goals
SMART Goal setting is one of the most common types of goal setting. Many people actually credit Peter Drucker for its invention. Using SMART goals makes sure you have every aspect of a goal that is needed to achieve it. SMART is actually an acronym. Although there have been different words used this is the most common way you’ll find it.
S.M.A.R.T.
Specific
A goal should be specific. If the goal is not clear it will be hard to stay focused. This is one of the situations where using the 5 “W’s” can be beneficial. Goals are not meant to be broad pick something that is extremely specific like learning 100 german words.
Measurable
Goals need to be measurable so that you can track progress. This measuring will also create excitement if you think about how close you are to finishing. The most important question to ask yourself is “How will I know when I’ve accomplished my goal?” Find a way to measure that answer.
Achievable
Your goal needs to be possible but it needs to push you to your limits. Don’t pick something like make 10 trillion dollars this year. That goal won’t be possible and it will hold you back. If you want to increase your income look at where you are at now and decide on something that will be difficult but achievable. A great question to ask is “how realistic am I being and how will I achieve this goal?”
Relevant
Pick a goal that is relevant to the things you enjoy, other goals, and what matters to you. If you don’t like cars don’t make a goal of learning to rebuild an engine. You will lose interest. Goals are about finding things that are relevant to you and sticking with them until you accomplish them.
Time Bound
Goals need to have a time limit set on them. Eventually is not a good example of a time limit. If you want to achieve a goal pick a time that will keep you motivated. Ask yourself “Can I do this in X months, in X weeks, in X days?” only you can pick a time limit for your goals.
The ONE Thing
This method of goal setting comes from Gary Keller’s best seller “The ONE Thing”. It has set new standards for what people can achieve. It has also become one of my personal favorite books. If you get a chance to read it you should. Using this method of goal setting you still need to follow the 3 main characteristics of a goal. It needs to be attainable, specific, and have a time limit. When you are picking your “ONE Thing” you still need to keep those characteristics in mind. Your “ONE Thing” is going to be the only goal you focus on once it’s picked. Which means this goal needs to be the most important thing to you. This goal also needs to be bigger than you can imagine. A good way to do it is to go 10 times bigger than what you want to achieve. Your “ONE Thing” will be broken down into many smaller things as you go. The best way to describe this method is with a list.
What is your “ONE Thing”?
What is “ONE Thing” you can do this year?
What is “ONE Thing” you can do this month?
What is “ONE Thing” you can do this week?
What is “ONE Thing” you can do today?
What is “ONE Thing” you can do right now?
Each step must lead to the next step when using “The ONE Thing” method. Your goals will be set from the end to the beginning one step at a time. This method is very flexible because as you learn and get closer to your “ONE Thing” you will be able to change what you are doing for each step. I highly recommend reading “The ONE Thing” by Gary Keller if you want to get the full experience from this method of goal setting. It is really a lifestyle more than anything.
10x Rule
The 10x Rule is a lifestyle that Grant Cardone lives by. In his book “The 10x Rule: The only difference between success and failure” he talks about how you can achieve success through putting in more effort than anyone else will. This method of goal setting is more of a lifestyle than any other method mentioned. The 10x Rule is about setting goals for yourself that are 10 times as big as what you want to accomplish. When you pick a goal that is 10 time bigger you will have to put in 10 times the effort. Going for such a big goal and putting so much effort in means you are guaranteed to at least reach your original goal. The 10x Rule is about getting away from average. You want to be the best at your life. This is the simplest method to use for goal setting because you are going to change your entire lifestyle. Anything you do needs to be 10 times what you expect. If you aren’t putting in the effort to be extraordinary you are being average. It is easy to be average but average people don’t live extraordinary lives. Grant Cardone does a much better job at explaining the 10x Rule than I could ever do. I highly recommend reading his book and getting involved in the 10x lifestyle.
Follow Through With Your Goals
You have gone through the effort of learning about goal setting. You’ve sat down and taken the time to make your goals. Now it is time to follow through with your goals. This is not the time ask “how to achieve our goals in life” or “how to achieve goals successfully”. This is your time to get out there and follow through. By now you will have created a list of goals to set for yourself. These are the things that you have always dreamed of. Why would you want to let yourself down? Take action and start living your dream, reach your goals by following through. You now know of 3 things that your goals should have. You know 3 types of goal setting methods that you can use. Don’t sit around waiting for your dreams to come true, make them come true. Taking one step towards your goals each day will let you live a life you never thought was possible. If you think goal setting will change your life please subscribe to our newsletter. If you have family or friends that are interested in learning more about goal setting let them know by sharing the post on your favorite social media. Thanks for reading!
The secret to building wealth starts with a personal budget. Wealthy people know where their money is coming from and where it goes. That means if you want to start creating wealth you need to understand your own personal finances. Your personal finances start with a budget!
Now you may be wondering what is personal budget is. It’s really simple but sounds complex. Here it goes, a personal budget is an itemized list of expected income and expenses. See what I mean by it sounds complex. What that really means is that you record every source of income and expenses you have on a consistent basis, to make it easy lets use a monthly time frame. This is something that every wealthy person does (or should do) and it will help you grow your wealth.
Budgeting is Important
Now you can see that personal budgets are important because they let you see your personal financial health. When comparing your income to your expenses you want to see a positive number. That positive number lets you know that you are making more money than you spend. Knowing how much more you make will allow you to invest and grow that number even faster. On the other hand if the expenses are more than the income you’re in trouble and need to make changes as soon as possible.
So now you’re probably wondering “How do I get started?” and that’s where I come in. First we are going to look at just your income and expenses. Once that is figured out we’ll build out a plan to grow your wealth over time. And remember when it comes to wealth the old saying “Rome wasn’t built in a day” really comes into play. You want to let your money make money for you. The longer it works the more you get paid!
Understanding the Components of a Personal Budget
On the path to creating your budget you will need to understand three (almost four) things. They are very simple and easy to remember. First we are going to look at your income. This will be all of the money that you have coming in on a regular basis. Next we will take a look at your expenses. These will be split into two categories, fixed and variable. This is why it’s almost four things. The last thing we will look at is cash flow. Your cash flow is going to be the money extra money you have or the debt we are trying to avoid.
Before we move on, make sure you have a way to write this down. The best way to do this is by making 3 sections. One for Income, one for expenses, and one for cash flow. Split your expense section in half and label one half as fixed and one half as variable.
Income
Income is the first thing that you want to familiarize yourself with. You will want to write down every source of income you have. This can be anything from income from work to a side hustle or even investments. If you get regular payments write them down. Once you have written down all of your forms of income it’s time to look at expenses. Total them up at the bottom of the income section.
Expenses
Expenses are what you spend your money on. They are a little more complicated than expenses because there are two types. First we’ll take a look at fixed expenses and then we’ll look at variable expenses.
Fixed
Fixed expenses are things you spend money on that you generally can’t change. This will include things like insurance, rent, utilities, mortgages, car payments, phone bills or any other bill that you are required to pay. Write down every single fixed expense that you have and total it at the bottom of the fixed section.
Variable
Variable expenses are the things that you spend your money on that you can change. This would be things like groceries, going out to eat, going to the movies, gas for weekend drives. Any expense in the variable section is something that you can easily control by choosing a cheaper option or living without. Write down all off theses expenses and total them up at the bottom of the variable section.
Before moving on to cash flow total up your expenses so you can have that number ready to go.
Cash flow
Cash flow is where you get to see how far your income goes each month. To calculate this take your income and subtract your total expenses. This will give you your cash flow. This number will either be positive if you spend less than you make or it will be negative if you spend more than you make. Either option is fine for right now as we will work towards the highest positive number possible.
Now that you know how much cash flow you have and the main components of a budget it’s time to take a look at how budgeting will help you create wealth.
Creating Wealth with a Personal Budget
This is the point where you have enough understanding of the components of a budget to start creating yours and building wealth. There are going to be several steps to this process including reducing your expenses, investing your cash flow, creating more income, and tracking your net worth. All of these components are crucial if you want to generate wealth.
Reducing Expenses
Reducing your expenses is one of the best places to start creating wealth. There’s that old saying “a penny saved is a penny earned.” That a great way to look at things because every time you save money you are reducing the time you need to work to get to a certain net worth.
Now let’s take a look at look at those expenses I had you write down before. This is when the fixed vs variable expenses comes in handy.
Your fixed costs are hard to change. You may be able to refinance loans or reduce insurance by shopping around but that can be very time consuming but often very rewarding. It’s definitely worth seeing if you can reduce your fixed costs but know there’s no guarantee that it can happen.
On the other hand variable costs are much easier to reduce. Your variable costs are going to be things like how much you spend eating out, Starbucks, name brand foods, and clothes. These are things you can easily control. Do you have Starbucks on or restaurants on your expense list often? Start making an effort to brew your own coffee and cook meals at home. If it’s a convenience thing get a coffee pot with a timer or start meal prepping. Are clothes your big expense? You can be stylish and still shop on a budget. Start looking at thrift stores or shop less frequently. There is big money to be saved when you cut your expenses.
Think about this, if you spend $5 per day on coffee that’s $1825 per year. Spending $10 a day on lunch gets you to $3650 per year. That’s a lot of money that you could be investing in yourself. Now that you see the power of saving and cutting expenses let’s start to think about investing.
Investing
This is the step in the process where your money starts to work for you. There are a ton of different investment options out there. They can range from real estate to stocks to vintage cars and everything in between.
Investing is a very personal thing. I can’t tell you exactly how to invest your money. I personally prefer real estate, stock, and note investing. These methods aren’t for everyone. It is best to spend time learning about investing in general before you start throwing your money around. You may not like rental properties because you don’t find being a landlord appealing however you may enjoy flipping properties. You won’t know until you get educated!
Some of the best ways to grow your investments is within retirement accounts. You’ve probably heard of 401k’s or IRA’s. These are tax sheltered accounts that help your investments grow faster. These are highly recommended because of tax advantages. This is definitely a topic to talk to an accountant about.
Remember that investing is where your money can grow exponentially. It works for you but sometimes you need to make more income.
Increasing Income
Having a higher income is great for generating wealth. If your income goes up but your expenses stay the same you suddenly have more money to invest. More money to invest means more money working for you.
There are a few ways to increase your income. You’ll have to decide what is best for you before you pick any of these methods.
Ask for a raise at work. Many people go a long time without asking for a raise. They wait until they are offered a raise and miss out on higher income. Before you ask, make sure you have a good reason that explains why you are worth more to the company. Show them performance records or that you have been educated. Be prepared to negotiate!
Look for a new job. It is possible that you are overqualified for the position you are in now. If that’s the case, there are going to be many companies looking for people like you to work for them. Look around and see if you are being paid a fair wage at the same time look for open positions!
Take on a side hustle. Side hustles can range from entrepreneurship like starting a business to getting a second job. If you think you have some extra time after your normal job to make some extra money do it!
Of course this isn’t a comprehensive list of all the options out there to make more money. These are just a few ideas that will help you brainstorm options. That extra income is going to make your net worth skyrocket so don’t wait until an opportunity comes. Create the opportunity!
Tracking Net Worth
Tracking your net worth is where all of the numbers come together. This is where you see how the wealth building. Your net worth is the money left over after you subtract your debts. The higher your net worth the wealthier you are.
To find your net worth add up all of your assets. These are things you own like houses, cars, investments, and cash. Once you have this number it’s time to subtract your debts. Your debts are going to be mortgages, auto loans, student loans, credit cards, or any other form of debt you have.
Wrapping Things Up
Do you like the number you are seeing? If you go through all of the steps over time you will start to love this number. What’s even better than your number now is your number in the future. As your investments grow and you create more cash flow this number will grow exponentially. Eventually you will be able to enjoy life without worrying about if you can make your next payment.
Now you can see how important it is to have an understanding of where your money goes. It is all too easy to skip tracking your expenses and spend all of your money. What you really want to do is get those dollars working for you. The more money you invest the faster it grows. Keep track of where your money goes and you will see why a personal budget is crucial on your journey to becoming wealth!
If this guide short helped you be sure to share it with your loved ones! One of the best gifts you can provide is education. Let’s build a community that loves personal finance and self development! Don’t forget to subscribe to our newsletter to get the most recent updates! And if you have a chance to leave a comment to tell us if budgeting has helped you!
This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.AcceptRejectRead More
Privacy & Cookies Policy
Privacy Overview
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
