A lot of lists wit new years resolutions already popped up in the online community. So after reading some and finding my own goals of this year were not all met, I started thinking of how to make a list for my own. Although I didn’t meet all goals from last year, I’m still very pleased with were we are now and how far we have come. Setting up financial goals is not that easy, because they are easily affected by other circumstances. Like getting another job, buying a house or something else. Therefore I’m changing the way on how I set up goals for the next year.
My overall goal for the future is to be financial independent. I want to achieve this through dividend growth investing. Last year I set up goals like achieving a certain amount of invested capital or in dividend income. But looking at how we invest our money, we have no problem to allocate enough money. We’ve already automated our savings every month, including our bonuses and add up everything that’s left over at the end of the month to. Our portfolio and dividends will continue to grow, and as long as we invest our savings we will get there at some point.
So in order to increase this amount we have to increase our savings rate. Which is already much higher, with 41%, than we anticipated. In order to find new ways of increasing our savings ratio I came up with our first goal:
1. Budget every month
We’re already tracking our income and expenses, but in a very passive matter. By automating our savings and still have money left over every month, we have found a good way to allocate money for investing. But it might be a way that can be improved nonetheless. To make things easier I want to start using a budgeting tool, like YNAB (You Need A Budget).
Even if I don’t really ‘need’ to budget, I still want to give it a shot for next year. Like our fellow bloggers at Dividend Diplomats like to say: Every Dollar Counts. Or Euro in our case.
This goal describes setting up a habit, doing something regularly in order to grow our savings rate. I don’t want to place a number on how high I want to increase our savings rate, because I want it to grow as high as possible. I honestly just don’t know how far we can go.
The second goal is one I postponed for a bit already. And will give more insight in when we achieve financial independence without naming a year or age as an end point.
2. Set up an early retirement plan
Although early retirement is not exactly the same as financial independence, I still like to call it like so. Because in this plan I will set up how much passive income we need in order to be financial independent. And therefore come to the moment were we could stop working if we wanted to. This way we also find out exactly how far we are on target, and how much more passive income we need to gain in the following years. Ideally the plan is included with a flexible planning by year and taxes are taken into account as well.
In our goal review article I used the following example to illustrate how I’m viewing the process of setting up goals:
What if you want to be able to run half a marathon. So you set a goal: to run half a marathon. And you start running once a week. Then when the date for the competition comes closer, you starting to train two or even three times a week. Only to find out you will not be ready on time… In order to complete half a marathon you need a plan. You need to know when to begin, how often you have to run and how fast you have to go. Without ‘the plan’ you will not make it. So instead of focussing on the goal, you have to focus on the habit or system instead: the training.
This is exactly why I have been checking on our own behavior, to see if there is anything we can improve or add to achieve our overall goal: to be financial independent.
I recently found an article which illustrated this as follows:
And were he asks us this question:
If you completely ignored your goals and focused only on your system, would you still get results?
If you want to know more, the article by James Clear describes this process in the detail.
Besides growing financially, there are 2 other topics I want to improve in. I want to grow the blog, Divnomics, and I want to grow as a person.
Therefore I had set up another to goals to include both topics as well for the 2017 resolutions.
3. Following a daily schedule – for blogging activities
Well, this may sound like a weird goal, but it’s something I have been wanting to try for a long time. Last year I made the goal to write 2 blogposts a week. Which was certainly doable. Although I noticed that I only would write to achieve this goal, I would not write more than necessary. There were days that I postponed the writing because it wasn’t needed… But it’s still something I would like to get better at, and I like doing.
So instead of setting up a fixed target, I want to write every day. Doesn’t matter if it’s only for 15 minutes or 2 hours, as long as I write. Besides writing there are all kinds of other things we bloggers could do in order to grow the blog of our own. Like setting up social media messages, or reading and commenting on other blogs, integrate SEO or even improving the design when needed. In order to stay on track and keep improving every day, I will set up a daily schedule every evening for the next day. If there is still something left on the list, it will move along to the next day until it’s finished.
4. Read in a book everyday for at least 15 minutes
Reading more is something most of us want to do. A lot has to do with setting priorities, but it’s also something easily set aside. At least for me. When I was younger I devoured books and read as many as I could. Now, not so much anymore. Even though I can read a lot of books for free because of my job. So I have no excuse to not read, still it’s out of my system for years. So instead of reading 1 book per month, I just want to read everyday. It’s an easy goal to achieve and it doesn’t matter how long it takes to finish a book as well.
I want to read more books because I want to learn, explore and be amazed by all the great stories that are out there. I’m not focusing on a specific genre, although I prefer non-fiction over fiction.
In order to keep track of my progress I will be using Goodreads, and start the new year with an updated account. For anyone that wants to follow, here’s my account.
As a person I’m very goal and result oriented. I’m just not very good at time management and easily distracted. So these goals I’ve set up will still help me getting the results I want, and simultaneously give me some focus in the way I work. For me, this will be a success when all these goals are integrated in my automatic behavior and from there will be a routine thing in my daily or weekly schedule.
Have you already set up your new years resolutions? Are they anywhere similar or do you have different goals you want to achieve? And anyone using a budgeting tool already (and satisfied with it)? Pls let us know in the comments below, very curious to find out!