One of the first things financial planners suggest we do with our money—once we’re beyond the basics of getting our regular bills paid–is set some solid goals. For instance, is one of your goals to save up for a down payment on a house? Invest enough for a comfortable retirement? Save for college for your kids?
I’m a big fan of goals. Setting future targets for my money helps me prioritize my current spending. For instance, if I know retirement is a goal (um, yes, a major one!), I make it a priority to have a certain dollar amount, or percentage of my earnings, whisked out of my bank account every month and invested in my retirement plan. (I like to have it done automatically, so I don’t forget to do it. It’s also a little less painful that way.) Likewise, if college savings for your kids are a goal, you’ll want to earmark some money each month and deposit in an account like a 529 college savings plan.
Financial goals simply help you create a path today toward your future wants and needs.
However, financial goals can also be a huge source of stress for many of us. We know what we’d like to be able to afford in the future, but sometimes we just don’t have enough money to cover all those goals right now. For instance, you may do a pretty good job of saving for retirement, and putting money into an emergency fund for things like a car break-down or basement water leak, but that’s about it. You’d like to be able to save for college, or set aside money for a bigger house, but it just isn’t going to happen. There’s not enough money to cover those goals and live your life today.
And that may stress you out. It might make you feel guilty that you don’t have a hefty college fund for your kids, or enough money to retire early, or to buy a bigger house for your growing family. Or you might feel disappointed when it seems like other people are able to save toward their financial goals, and you’re not.
But here’s an interesting point Leo Babauta made to me, when I recently took a class with him on The Zen of Work: Financial goals are great, but they’re not “real.” They’re just expectations we’ve created for ourselves. They’re made up.
So if you can’t save toward a particular financial goal right now, it’s OK to let go of it (really!). Maybe you can focus on what you need to do right now (pay bills, keep up your house, pay for clothes and shoes for your kids). Let that be enough. After all, you can’t really know what might happen in the future. For instance, regarding the college savings goal that you might not be able to work toward right now: Your child could end up with a scholarship to college, or work and take a little longer to graduate and pay for his own education. So worrying now about that goal of “saving for college”—and beating yourself up for not being able to work on it– might be wasted energy.
Again, I’m not advocating getting rid of goals altogether. But when a financial goal is starting to feel completely unreachable, or is keeping you awake at night with worry or disappointment, it may be time to let it go.
When you do release your grip a little, you might find that you are more flexible and capable than you thought. Other alternatives might bubble up that you wouldn’t have considered otherwise. Give it a try. Consider it your own little version of financial peace.
Photo by Al King