I used to be over $100k in debt. How did I get out of that mess and build an investment portfolio of close to 6 figures? FINANCIAL GOAL SETTING.

I’m telling you – 1 year of serious focus & alignment can put you 10 years ahead in life! If you could use a motivational kick in the ass, plus some tips on how to set good financial goals (and actually achieve them)…. then KEEP READING 😉

Let’s talk about setting financial goals. The new year is just around the corner, and we all know how important it is to have goals – goals that get you closer to the life that you truly want.

FOUR SMALL STEPS TO SET FINANCIAL GOALS

In this blog post, I will share with you 4 simple steps to set financial goals and actually achieve them. I know it’ll be encouraging for many of you to hear about my own personal journey as well. But don’t take my word for it – all the tips and strategies I’m going to share with you are backed by research and data as well!

#1 THINK BIG BUT START SMALL

A lot of us have big goals for ourselves, but sometimes that gap between where you are now and where you want to be can be so big that it paralyzes you from taking action.

Back when I started my personal finance journey, I had $100k of student loans, but I always knew I wanted to be a millionaire. But whenever I thought about wanting to be a millionaire, instead of motivating me to take action, I just felt super deflated and helpless. Like, here I am with a net worth of NEGATIVE $100k, so I didn’t see a path to one day having a POSITIVE net worth of $1M.

Humans are motivated by the belief that they can make progress. If something seems impossible, you’re not even going to try. In a study done by Stanford researcher Szu-chi Huang, they found that “When you are just starting a pursuit, feeling reassured that it’s actually doable is important, and achieving sub-goal increases that sense of attainability.”

One day, I realized that it would feel amazing just to be at ZERO. Forget $1M – just having a net worth that’s no longer negative would be amazing! So rather than thinking about this huge financial goal in the distant future, I decided to focus on a sub-goal of getting to zero. It seemed so much more achievable for me, and I’m telling you… EVERYTHING changed from that moment on.

I started chipping away at my debt, $1k at a time. Every time that thousand-dollar decimal place went down, I focused on the progress I was making. These moments of mini-progress created a snowball effect, it motivated me SO much to keep going. It’s almost like I got addicted to that feeling, so I started paying off my debt with whatever extra money I could come up with. It literally became a hobby of mine, and 3 years later, my net worth finally crossed the zero mark.

So think BIG, but start small. It’s super cliche, but a journey of a thousand miles really does begin with a single step. And just because you start small doesn’t mean you think small. Now that I hit the zero mark, now I’m focused on the $100k mark. Then, when I reach that sub-goal, I’ll start focusing on the half-million mark. Then, when I reach that sub-goal, I’ll focus on the $1M mark. See how it works?

So for step 1, I want you to think about what starting small looks like for you right now. Just close your eyes and think about it for a second. If it gets you a little bit closer to your ultimate goal, and it makes you feel motivated vs deflated, then you know you’re on the right track.

#2 Activate your RAS

Your RAS (Reticular Activating System) is the part of your brain that tells you what to notice. Selectively filters out information. At any given moment, there are billions of bits of data coming at you. So the RAS is a survival mechanism that saves your brain from having to process all that information all the time. Without the RAS, your brain would short-circuit, like a 120V blowdryer that you plug into a 240V outlet.

Even without being consciously aware of it, your RAS selectively notices only what it thinks is important. That’s why you can often tune out the noise as you’re walking down a busy street, but when someone calls out your name, you instantly snap to it.

So when you tell your RAS what’s important, it will start noticing things around you related to that. The more specific, the better. Recently, I set a goal to get a puppy in the next year. I got really specific, and I know I want a grey-colored French bulldog. As soon as I did that, I started noticing French bulldogs everywhere – on the street, in my building, on my Instagram feed – and pretty soon, my neighbor who has a French bulldog asked me to petsit while she was away.

That’s how the RAS works – when you tell your brain what you want, it starts looking for ways to make that a part of your reality, and it also filters out everything that isn’t in line with what you want. The RAS is literally the scientific proof behind the Law of Attraction!

So here’s what I want you to do: I want you to get super clear on your financial goal, and write it down. Be specific! Instead of “I want to get out of debt”, make it “I want to pay off my Discover credit card by February.” Instead of “I want financial security”, make it “I want to build a $5k emergency fund in 3 months”. Instead of “I want to start investing for my future,” make it “I want to have $10k in my Roth IRA by my 30th bday”. Put it on a sticky note on your mirror, or somewhere where you can see it DAILY.

And even if you have no idea how you’re gonna come up with that money, don’t worry the HOW, just worry about the WHAT! Your RAS is going to figure out how. It works 24/7 to scan your environment for all the messages, people, and opportunities related to your financial goal.

When I was working to get out of negative net worth, I had a piece of paper on my wall where I had my goal net worth clearly stated. Now, it’s a spreadsheet that I look at every day.

#3 Plan for obstacles in advance

Plan ahead for anything that might derail you for obstacles in advance. Think about all the things that might derail you and deal with them now – before it happens. Do you have a friend with expensive taste, and she always wants you to go to fancy restaurants with her, go on trips with her, etc? Tell her in advance that you can’t spend that much on going out anymore, because you have financial goals. If she’s a REAL friend, she’ll support your decision and find other ways to hang out with you. If not – then you need to defriend her ASAP.

Other things that might derail you – if you shop online a little too much, then delete the Amazon Prime app from your phone, and delete all the auto-saved credit card information.

For me, it was spending too much on Seamless. When I’m hungry and don’t have any food in the fridge, I’ll just go crazy on food delivery. So planning ahead to always have groceries in the fridge was one of the things I did.

Basically, it takes a LOT to reach your financial goals, don’t expose yourself to anything that might make it harder. When your best friend calls you on a Friday night expecting to go out for yet another $70 dinner, it can be hard to say no. Ask her in advance not to do that. Do whatever you need to do to set up your environment to naturally breed financial success.

#4 Eliminate the need to exercise will power

The fourth step is to eliminate the need to exercise will power, by putting your financial goals on AUTOPILOT. When I was climbing my way out of debt, I had automatic monthly payments on ACH from my checking account to my student loans. The recurring amount was a little more than I was comfortable with, but once I set it on autopilot, it was no longer a question of IF I’m going to pay off debt, or whether I should pay off this much or that much. It just became a fact.

And now, my financial goals have expanded to things like investing goals, and I put all of that on autopilot as well. Here’s a screenshot of a recurring automatic monthly investment that I set up in my Fidelity account: on the 1st of every month, $200 goes from my checking account to my HSA, and it automatically buys more of the index funds that I already own.

If I left it up to chance, I’d probably never remember to log in and buy more investments, I’d probably come up with all kinds of excuses to not save that $200 and to spend it on something else instead. But because it’s all automated, I get closer to my financial goals whether I feel like it or not. Wherever possible, put your goals on autopilot.

Ok, if you’re feeling inspired and full of ideas by now, GOOD. Don’t let this be some Youtube video that you consume but don’t take any action on. To kickstart your financial goal-setting, I want you to take ONE tiny baby step action RIGHT NOW.

When I started my $100k debt payoff goal, that baby step for me was to just add up all my debts on a spreadsheet. Easy, fast, something you can do right now.

Here are some other ideas for you:

• If your goal is saving money: go through your credit card statement and cancel ONE monthly subscription that you don’t really need, and reroute that to savings instead
• If your goal is investing: call your HR department and make sure you’re maxing out your 401k employer match

It’s too easy to think about your financial goals and go “I’ll start tomorrow”. No, start today! Think of one small thing you can do and tell me what it is in the comments below!

Like RIGHT NOW. I’ll wait.

Thanks so much for taking your time reading this article until the end! I really hope this blog has helped you learn how to set good financial goals (and ACTUALLY achieve them). It’s kinda my first time sharing so openly – but hey – it felt pretty good and I’m sure a lot of you can relate to my stories.