Setting goals for 2022? How about new years resolutions?
If financial freedom is on your mind, check out this video or keep reading for some questions you may not have thought about — but should definitely ask yourself when setting money goals!
Question #1: What would you do if you didn’t have to work for money?
You may be wondering why we’re asking this question when we’re setting financial goals.
In my book, I talk about two paths to financial freedom. One is job freedom, and one is early retirement.
Job freedom is all about having the freedom to work the perfect job, only do stuff that you love, and to leave a job if it’s not serving you (and go find one that does).
You have to start with knowing what you want out of work. So take a moment to think about it.
If you did not have to work for money what would you be doing with your time? Then set a plan to make that your reality.
Question #2: What would you do if you knew you couldn’t fail?
A lot of times when we think about financial freedom, we’re so burnt out from work that we just imagine sitting on the beach drinking Daiquiris all day.
Now most of us would actually get bored doing that after a while. So so it’s worth it to ask ourselves the follow-up question.
Asking what you would do if you knew you couldn’t fail challenges you to really dig deep and figure out what matters to you. What risks do you want to take? What would you challenge yourself to create in the world?
Really think about this question and then make the answer part of your financial plan.
Question #3: What are you spending money on that’s not aligned with your values?
Now that you know what you’re doing with money and how you’re making it, let’s talk about how you’re spending it. As you set your financial goals for this year, we need to reflect on what happened last year. To do that, ask yourself question #3.
I’m not a fan of cutting budgets just because. Nor am I a fan of telling you what to spend your money on. Everyone’s budget is personal.
Here’s the trick: you have to ask yourself what matters to you and then align your spending with your values. Only spend on the things that matter and cut out everything else.
For example, I love Beyonce and I am happy to spend money from my budget to see her up close when I go to her concerts. On the other hand, one thing I don’t love is going shopping at the mall. I have almost no money in my budget for going to the mall and buying clothes, but there’s plenty of money in my budget for Bey!
Go through your budget line by line (plug your expenses into an app like Mint if you don’t know where your money went last year) and then figure out if you’re spending according to your own personal values.
Question #4: Are you earning the full value of your time?
Do you know that each day you wake up and go to work, you’re trading your life energy for money? It’s worth thinking about how much money you’re trading your life energy for.
Here is a quick way to find out. Add up all of the time you spend on work. This includes getting ready for work in the morning. It includes commuting (if for some reason you’re still in the office these days).
And it includes anything you need to recover from your job. If you’re stressed, that therapy appointment is a work expense. Also, it includes any wardrobe that you need to purchase for your work environment.
Add up all of those extra expenses for work. Subtract it from how much money you make. Then add up all the time you spend on work-related activities. Divide how much money you make by how much time you spend on work-related activities.
That will tell you how much you’re trading each hour of your life for.
Now that you have that number, ask yourself the question: are you earning the full value of your time? If not, making a plan to fix this has to go into your goals for the year.
Question #5: How can you make more of your money work for you?
This question is about planning for the future. Did you know that every dollar you invest today is an hour that you don’t have to work in the future? Investing today makes your money work for you down the line.
If you’re not investing any money at all, this is the year to start. And if you are investing, this is the year to increase that number.
Set a goal for yourself. What percentage of your income are you going to invest?
Remember, you are trading hours of your life for money, so the money that you get from going to work is the most expensive money you’ll ever have.
Don’t spend it on crappity crap. Spend it on things that bring you joy! Then cut everything else and put that money towards investing.
So how did you do? Did you come up with some good answers to these questions? How are your financial goals shaping up as a result?