My Short Term Mindset is Getting in the way of my Long Term Goals

When you work in the personal finance industry people kind of expect you to be wealthy.  I guess it is similar to when you retain the services of a personal trainer.  You don’t feel inspired or confident by an out of shape personal trainer.

When I tell people what I do for a living some of them assume that I must be financially set.  The reality is that I do make some better choices sure, but I am far from my ideal financial state.

Keep you goals in reach

Keep you goals in reach! 

Like most average middle class families, we struggle from time to time.

We have successfully avoided the trap of easy credit and limit our debt to our mortgage. We also have a solid emergency fund which helps us out all of the time.

The area I am most unhappy with is our long term savings.  For years I thought just realizing that we needed a plan for the long term gave us a leg up.

Unfortunately knowledge without action is pretty much worthless.

So why are we missing the boat with our long term savings goals?  The primary issue we face is that we do a terrible job of giving up today in order to save for tomorrow.

Our children’s college funds, our retirement…these events feel so far off in our minds eye that we relegate them to the back of the pile.

On some level I know this is a mistake (Clearly because I am writing a blog about it…) but we just can’t seem to discipline ourselves to make these goals a priority.  We don’t want to have to do without something ‘we think we need right now’ for something in our future.

Just so you can understand how completely terrible we have been about this, my husband and I have actually begun to discuss next summer’s vacation.

Why a vacation next summer merits discussion baffles even me…it’s only September!  

The fact that we are willing to talk about a vacation when we know we have these goals lurking in the background suggests we have a problem.

These goals are not going to remain long term goals forever.  Pretty soon these goals will morph into short term goals and we will be way under the gun.

So I guess I need to create a short term plan to get myself on track with my long term goals.  I am open to suggestions!

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11 Responses to “My Short Term Mindset is Getting in the way of my Long Term Goals”

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  1. JMK says:

    Thinking retirement has to be a long way off encourages you to get lazy about the savings. Deferring putting aside savings for your retirement ensures it will be a long way off. It’s kind of a chicken vs egg situation.
    If you actually want to work until you’re 65 or beyond you only need to save 10% from an early age, or far more if you start late. Given a choice I’d bet most people would opt to retire (or at least be able to retire) far sooner. There are many sites to get the calculations to determine the savings rate and the number of years of work required before retirement. For a middle of the road example, a 50% savings rate means retirement in 17 years. Someone starting at 25 should be kissing the boss goodbye no later than 42. Even if you don’t start until you’re 40 you should be done at 57. When you have a target savings goal and a real retirement date in the not so distant future, finding the motivation to stick to it becomes much easier. I only wish I’d figured it out in my 20s or even 30s. Instead I got serious in my mid 40s and now plan to retire at 57 rather than 65. I still kick myself at the years of saving I’ve lost, but at least I’ve been able to move up my retirement by 8 years in just the past 5 years.

    FYI – we’re finalizing our summer 2014 travel also. To get the free flights on our credit card points we have to book now to get the dates we want.

    • Hi JMK, I love this! You are right, it’s just a matter of taking closer look at the details of the goal. That makes the entire goal more a function of the present and not the distant future. Thanks so much! Okay, your reasoning for planning your vacation now is far better than my own..

  2. Travis says:

    I don’t think it’s a matter of not planning for the next summer vacation and not planning for retirement. I think you need to do both. Planning your next vacation (if financially feasible) is one of those things that allows you to recharge the batteries, is a “memory maker” with friends and family, and generally makes life worth living. In my opinion, making it to retirement age with a healthy nest egg, but having accumulated that nest egg through a life of living in a cardboard box and living off of bread and water seems like an awful lot of wasted years. There has to be a happy medium, right?

    • Hey Travis,

      Yes, you are right about finding that happy medium. I think my true frustration is that we just don’t really discuss the long term at all. That is my goal, to have regular discussions so we can make it more of a real live goal LOL. Thanks!

  3. For each goal, including next summer’s vacation, you need a “Planned Savings” fund. Then set up payroll deductions if necessary to channel money each month into each fund. The amount you channel each month depends on your end $$ goal and how many months away the goal is. I think it’s good you’re talking about next summer’s vacation. By sketching it out this far ahead, you can establish a budget and set aside enough cash each month to avoid going into debt to pay for it. Same with retirement, kid’s college, etc.

  4. Den says:

    We are behind too on retirement……so every 6 months we up our retirement contribution by 1%…..we are now up to 7% and it feels great. It’s a small change so we can adjust our day to day budget, but we are slowly getting up to the max of 15%.

  5. Hi Kurt,

    I like what you are saying. Just keep it simple and make the plan. Thanks for stopping by and sharing the advice :-)

  6. Monica says:

    I also believe you can plan for next years vacation and still work on your long term goal. Why not start with a small amount that goes directly into a savings account so you don’t see it. Then when you don’t miss that small amount in your daily finances increase it another small amount. Continue this trend until you feel secure with the amount being put away for your long term goals. I found doing it in small steps makes it much easier than trying to start out big. When I try to start out big I tend to set myself up for failure. Good luck my friend!

    • Hi Monica,

      I really do think the small increments approach is more manageable. I am going to make an effort to set micro goals for that long term goal to make it a short term event LOL. Thanks so much for stopping by with your advice :-)

  7. For me, automating my retirement savings has helped a bunch! Not seeing the money in the first place really helps.

    • Hi Lisa,

      Automation is our friend!!! Could not agree with you more. That is definitely one area where I feel there is an opportunity…I need to up my 401K contribution. Out of sight and out of mind really can make a world of difference. Thank you for sharing some tips!!!!

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