Categories: personal finance, values, saving, goal setting

“Buy what thou hast no need of and ere long thou shalt sell thy necessities.”
Benjamin Franklin

One of the great challenges today is balancing your present needs and wants with those of the future. It requires quite a bit of introspection.  While almost every Ben Franklin quote oozes wisdom, this one in particular, speaks to the reality that if you go overboard consuming recklessly, you will likely run out of money, fall into debt, and end up in a bad way!

Main Topic

There is much said about saving for this and saving for that and a lot about sacrificing and giving up something today so you have money for tomorrow. And of course, you all know that in order to have money to buy stuff later, a car, a home, a vacation, etc.; you have to save. But, who has actually sat down and figured out; EXACTLY what you will want in the future and just how much IT WILL COST?

Well, don’t worry, you don’t need to do right now! Before you even think about how much money you need later, there is an important step to take first.

Figure out what you are passionate about and want to spend your time and money on!

Simply put, spending time and money on things that improve your life is the way to have a better life!

Trent, from The Simple Dollar site wrote a fascinating post on February 5, 2010 about change called, “What’s Coming Next?” He surveyed his life over the past several years and compared his LIFE EXPECTATIONS (take some college classes and work in a factory; work at Microsoft; remain in debt, unmarried, and childless) with his REALITY (work in a genetics lab, a non-profit, become a full time writer, get some books published, get married, get out of debt, and have 3 kids). His post reminded me that there is a degree  of uncertainty in life. Yet in spite of this uncertainty, it is important to plan and set some goals.

Because, if you don’t figure out what you enjoy, and make some effort to get more of those pleasurable activities in your life, it just won’t happen.

Trent beautifully illustrated this lesson;

Life is best led striving to do what you love.

By becoming a full time writer and published author, Trent turned his passion into cash. And that is a life lesson for all!

When I first decided to share my personal finance knowledge and experience on a blog, I started reading other blogs to help me clarify where I would fit in. The Simple Dollar really spoke to me because of Trent’s common sense approach and the honesty in his writing style. I even bought his ebook for $2.00 entitled Build a Better Blog. But the real reason I continue to frequent his site is because it is obvious he is driven by a passion for writing, frugal living, and personal finance.

Practical Application            

If you don’t already know what you are passionate about, take some action to figure it out! Life is much better when you spend time on activities which are important to you. Having a job you like is fabulous, because it doesn’t feel so much like work! So if you aren’t sure what you are passionate about, check out What Color is Your Parachute by Richard Bolles. Also, think about the times in life when you lost yourself in what you were doing? Ask yourself, “Can I do more of those types of activities?”

Spending more time on fulfilling activities equals more pleasure!      

You may discover that some of your passions cost money or even more schooling or training. Maybe you want to transition into another career, learn to sky dive, take an art class, or explore Asia. And of course, most of us realize that we want the option to have some cash when we retire to enjoy our potential longevity. But if you don’t consciously explore your passions and set some goals, you are left with little possibility of achieving them.

Nor will you have any way of knowing how much money you might need now or in the future.

Figuring out what you want in life is best started with goal-setting. There is a ton of literature about goal setting, and the bulk of it can be summed up in a few key statements:

To achieve a goal:

ü      Write it down in detail

ü      Break it up into small steps

ü      Put a time line on it

ü      Talk about it to others

ü      Start right now

Action Steps:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it for all of your personal finance goals, thoughts, activities, and plans.

Get started immediately! Grab a sheet of paper and make 3 columns.

1. In column 1, write down some short (6 months-1 year), medium (2-5 years), and long term (more than 5 years) goals in a column.

2. In column 2, write down how much money you will need to achieve those goals.

3. In column 3, write down how much you already have saved for each goal.

Example: