How To Set Money Goals And Reach Them: A 7-Step Guide By Future Front
Whether you’re a leader, small business owner, independent artist or side hustling creative, your career pathway will take resilience and strategic decision-making—especially when it comes to money.
So, how can we prepare ourselves to flourish financially? Over a three-part series of discussions in partnership with Capital One in November and December 2019, we met with different Texas-based creatives and entrepreneurs—chef and entrepreneur Sharon Mays, Moontower Rentals CEO Christie Zangrilli, No Good Tattoo founder Emily Ng, eleMINT Skin owner Shauntavia Ward and finance nerd Kate Herrmann—to talk tackling money setbacks, leveling up and staying financially informed. Keep reading for seven takeaways from our speakers on challenging your money fears and changing your relationship to your finances.
Editor’s Note: We’d like to thank Capital One for their commitment to supporting women in entrepreneurship and small business owners and their interest in making our Money Mindsets series possible last fall. Although this guide’s content has in no way been influenced by their sponsorship, we were able to produce it with their support.
HERE ARE 7 WAYS TO SET MONEY GOALS AND REACHING THEM:
1.) Figure out what you spend—and you’ll find out where you stand.
According to Kate Herrmann, a self-professed finance nerd, her goal budget looks like a 50/30/20 model. Ideally, she’s spending 50% of her income each month on her core needs, 30% of her income on nonessentials and 20% of her income on savings and paying off any debts. With this budget model, she’s set up to start building wealth and making investments month over month. So, if you started to separate out your expenses into core needs, nonessentials and savings/debt repayment, what would that breakdown look like for you?
Finding out where your money goes and how you spend it will help you determine what kind of financial goals are feasible for your circumstances. It’ll help you determine if you need to make more money to cover your core needs or if you’re in a good place to start making investments.
(Need help tracking your expenses and getting started? Use an accounting software like FreshBooks, Quickbooks or Mint to start figuring out how much you’re spending. If you don’t want to use a software, just start reviewing your bank statements and categorizing how you spend your income each month.)
2.) Work backward from your goal.
Herrmann also shared that one of the key components of budgeting is figuring out what you want and designing your budget around those goals. After you know what your income looks like and where you’re spending it, take a minute to think about what you want. Do you just want to have more money to spend on vacations each year? Are you looking to open a retirement account within the next three years? Do you want to try your hand at investing? Do you want to repay debt faster? Or perhaps your first goal is simply get more comfortable with recording and tracking your expenses and income—no matter where you start, it’s easier to work backward from a goal and break down the things you need to do day over day and week over week to reach it.
3.) Figure out what you need to know and start to research.
Once you’ve identified your goal, map out what you do and don’t know about getting there. What do you need to research? What makes you uncomfortable? What part of the process makes you curious? Lean into these unknowns and practice getting more familiar with the world of finance. Herrmann recommended two books, “All Your Worth” by Elizabeth Warren and “Big Magic” by Elizabeth Gilbert, to dip your toes in.
4.) Read the fine print and and don’t be afraid to ask questions.
We are not taught how to manage our finances or budget growing up, so prepare for the discomfort that comes with being outside of your circle of competence. You may not have a solid financial vocabulary yet, but that doesn’t mean you can’t learn or ask questions. Christine Zangrilli, co-owner and CEO of Moontower Rentals, recommended chatting with an accountant or CPA while you research. Beyond helping you with your taxes, they can also be a good resource for better understanding your financial options.
5.) Know your floor and your ceiling before you take a big financial risk.
Perhaps your financial goal is a little risky. Maybe you’re looking to open a business or take out a loan, and you’re not confident in the return. When faced with those kinds of money decisions, chef and entrepreneur Sharon Mays suggested determining your floor and your ceiling. How much can you truly afford to lose if nothing goes according to plan? How much do you need to make back to justify the investment and how long will that take? Will other aspects of your finances or life be in jeopardy if you choose to take that risk and will it be worth it? For eleMINT Skin founder Shauntavia Ward, choosing to keep a part-time job during the first six months of her business was part of her strategy. She knew she was going to need that income to reduce her anxiety and make clear-headed decisions about the business’ expenses and needs.
6.) Build relationships with your money choices.
Whether you’re opening a bank account, choosing an accountant or working with a financial planner to determine your options, look at each of these relationships as investments. Mays said she only works with planners, business partners, credit card providers and financial institutions that will sit down with her, define terms and talk things through.
7.) Everything has its cycle—it is never the end of the world if things don’t go as planned.
Life happens and life changes. Sometimes, we make poor investments. Sometimes, we have financial emergencies. Sometimes, we procrastinate, because money fears are real. For No Good Tattoo founder Emily Ng, said that the hardest part of figuring out her personal and business finances was challenging herself to even deal with them. “If you're waiting on someone more experienced to give you an answer, it might never happen. Do the research, and then just go for it! Your goals aren’t final, and you can always change them later,” she said.
So, in summary, commit to learning more about money and be mindful of the risks you take with your finances. Set measurable goals and pivot as your life changes. Money is something you deserve to understand—and if you practice, it’s also something you can be good at.
LOOKING FOR MORE MONEY RESOURCES?
Stay tuned for more workshops with BBATX on our calendar and learn more about what we do at bossbabes.org/programming.