What financial milestones are you hoping to achieve over the course of your life? As I’ve said before, I think the cookie cutter milestones of getting married, buying a house, adopting a dog, having 2.5 kids, and retiring are a bit overrated. However, I think the practice of crafting your own financial milestones that really align with your lifestyle, values, and goals – even if it includes some or all of those more conventional milestones – is highly underrated.
Living well financially is about more than just getting from one day to the next, it’s about leveraging the money you have to create a more fulfilling life for yourself and others. These milestones are the mile markers on our journey to a more fulfilling life.
So, what might these milestones look like?
A few weeks ago, I was talking to my dear friend and fellow blogger, Michelle Boss (aka The Money Boss). She was bursting at the seams with good news. She and her husband had achieved a significant financial milestone – they had started the process of purchasing a piece of land where they would someday build their very own inn. This had been a long-time dream for them both – and now it was going to become a reality. They had stepped out, giving life to this long held dream, and they couldn’t be more excited.
A few days ago, a Facebook friend of mine posted that she and her husband had FINALLY finished paying off all of their student loans. She was completely overjoyed to have this weight off of their shoulders.
I find Facebook to be a great place to see these financial milestones – when they come to fruition. We see pictures of the happy couple standing in front of their newly purchased home, a picture of someone cutting up their credit cards, or a family about to embark on their dream vacation. But, we don’t often get to consider how these dreams became a reality. What hard work was done? What tough decisions were made? What steps did these people take to make these dreams real?
Yesterday, a friend shared with me his aspiration to someday become the CEO of a company one day. While you might say: “that’s a career milestone.” Couldn’t it also be a financial one, too? I’m not just referring to the higher compensation that you might receive as a CEO. I’m referring to the financial steps you might need to take to get there. What investments might he need to make to achieve this milestone? My friend might need to seek out additional training and learning opportunities to prepare for this role. He may need to take a job that might pay him a little less than he’d like because it’s a good stepping stone toward his larger goal. He may decide to seek out additional mentoring or career coaching.
I am realizing as I’m writing this post that this is a topic my husband and I have never explicitly talked about. Sure, we’ve discussed different milestones that we’d like to reach like paying off student loan debt, starting our own businesses, fully-funding our emergency fund, and buying an overland vehicle that can bring some of our off-grid road trip aspirations to life. But, other than student loan debt repayment, I can’t say we’ve ever set a timeline for these goals or really considered the concrete steps we’ll need to take to get there. We’ve just marked those goals “someday” and haven’t made any plans to work toward them. This is going on our list for our next Burgers & Budgets meeting.
One of my big aspirations is to become even more generous to the causes we care about. This feels like one of the best ways that we can align our money with our values. We might do this by starting a foundation or a non-profit arm of our businesses. I want to move our generosity to the next level. But, how do we make that happen and when? I don’t expect these opportunities to be “next level” generous to just fall into our laps, we have to plan for it. Where does this fit in with our other goals? What are we willing to give up to make this a reality?
Looking to craft some financial milestones of your own? Here are some small steps you can take to give those dreams the roots they need to grow:
1. Brainstorm: Begin by making a list of potential milestones. You might begin by using post-it notes and writing down as many ideas as you can. This is a no-judgement zone. When doing this activity with a partner, I suggest writing down your ideas separately for few minutes and comparing notes later.
2. Create the Short List: Talk through your ideas with a partner or friend and slowly winnow down your list. You may find that some ideas fit together into one milestone. Have your values and your vision of a fulfilling life front of mind – do these milestones align with your values and vision or detract from it? You can have as few or as many milestones as you like – I think five is a good place to start.
3. Prioritize Your List and Set a Timeline: Put your milestones in order of importance and begin to add approximate dates for achievement of these goals. It’s tempting to put the milestones that are easiest to achieve first on the list, but I encourage you to step back and consider what’s most important to you in the long-term. For instance, would you be better off waiting to buy a house if that meant you could pay off your student loans sooner? Would you consider waiting to buy a new car if that meant you could go on your dream vacation sooner?
4. Begin Working Out the Details: Now the real work comes in; creating a plan that makes these milestones possible. Some of these milestones you can work on simultaneously and others will need to wait. Begin working out a concrete plan for your top three milestones. This isn’t the time for estimates, it’s time to dig into the details and see how much these milestones will really cost and what intermediate steps you’ll need to take to get there. How much of your income can you afford to put toward these milestones? Are there expenses you could cut to make these milestones a reality sooner?
What are your financial milestones? Share in the comments below!