What is your one-year financial plan?

The 'Year-Long Plot,' as Hamm calls it, is a detailed financial plan, week by week, of how you’ll move from where you’re at right now to the financial goal you want to achieve in one year.

By , Guest blogger

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    Thinking about where you want to be financially a year from today can help you with more near-term financial goals.
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Where do you want to be a year from now?

Would you like to have some debts paid off? Maybe you dream of having finished an art project or a major home improvement project. Perhaps you dream of having a social circle to participate in.

We all have things we’d love to accomplish, things that are a bit more real than a daydream but still far away from reality. I certainly have a long list of those things.

Recommended: Five ways to get the most from your credit card

Lately, I’ve been trying a new approach for these types of dreams and I’ve found that it works out really well, at least for me. In fact, I’ve had enough success with it that I feel like sharing it with you.

I call it “The Year-Long Plot.” It’s pretty straightforward. All you do is plot out a detailed plan, week by week, of how you’ll move from where you’re at right now to the goal you want to achieve in one year. 

Let’s say you want to pay off a $5,000 debt in the next year. The route to get there involves coming up with $100 a week, which will add up to $5,200 over the course of a year.

So, you make that your weekly goal. “This week, I’m going to scrounge together $100 and use it as an extra debt payment at the end of the month.”

How will you do it? All you really have to worry about is that week. If you carry forward with your goal of coming up with that $100 in that week, and you just repeat that goal over and over and over again, you’re going to pay off that big debt in its entirety.

The entire process becomes a simple goal you can achieve in one week.

The focus then becomes how to pull off that week-long goal. Nothing else matters but that week-long goal. Your mission is solely to figure out how to save $100 through your actions this week. You can eat cheap. You can skip some entertainment. You can figure out some longer-term savings so that the $100 is easier to come by in future weeks. It’s all about this week and what you can accomplish during it.

Let’s look at another example. Let’s say you want to write a novel of a length around 200,000 words. If you write 5,000 words a week, you’ll have that first draft done in forty weeks.

So, let’s start with that goal. Your goal, each and every week, is to get 5,000 words down in your first draft. That’s your sole goal. You can spend the first week or two making an outline, and then spend the last several weeks editing and revising that first draft.

You can make very specific and detailed plans, too. Have you dreamed of refinishing your kitchen? Get a home improvement book, learn about the process, and start building a one-year timeline with specific plans for each week (with a few weeks of breathing room, of course). Have you wanted to read some of the great books of literature? Pick out twelve of them and develop a one-year reading plan for them.

The whole goal is to break it down into something you can do this week. When it’s a small goal to achieve in a week, it’s far more achievable than a giant goal that looms too large to ever give it a shot.

The post The Year-Long Plot appeared first on The Simple Dollar.

Recommended: Five ways to get the most from your credit card

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