The Key to Getting Ahead

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Whether you are just starting out in life, barely keeping your head above water with your finances, or find yourself in a position of starting over, you may have wondered how some people seem to get ahead financially while others don’t.

Why does my co-worker Julie have a new house, and I don’t? Where does my neighbor Terry get the money to drive a new truck? How can the Garcias afford to go on so many trips?

Too often, people believe that if they only made more money, then they could have what they want. While everyone needs a certain amount of money to cover basic expenses, more income does not necessarily bring financial independence or success. Many people who earn generous incomes have too much debt, while others with modest incomes have little debt and are still able to get what they want.

The key to managing your finances is not based on complex rules or secret formulas. You can successfully manage your money and get more of the things you want. What helps people get what they want? The answer is a budget.

A budget—the key to financial success? Maybe that sounds too simple, or perhaps you can relate to one or more of the responses people often have to the word budget:

Budgets don’t work.
Budgets are a model only, not real.
Budgets are only for people who don’t have a good income.
Budgets are only for people who are in financial trouble.
Budgets–who needs one; I know what my expenses are.
Budgets are too much work.
Budgets mean you have to do without.

Despite the often negative feelings people have about budgets, they need not be something you dread, especially when you view them as a tool for helping you get what you want. Budgeting can become a rewarding process when you see a clear connection between creating a budget and reaching your goals. Not connected to your goals, however, budgets can seem to be a series of meaningless numbers on paper, not connected to you, or to your life.

In many of the budgeting books available on the market, you are instructed to create a complicated budget with a long list of expense categories. With the best of intentions, you follow the advice, but after a few months, you fail to stick to your plan and are left feeling frustrated. Imagine how you would have felt, however, if the budget you created was more than a series of categories and a bunch of numbers and instead became a way of helping you get what you want.

Good financial advice is always based on what you want to achieve with your money, not on a list of impersonal facts and figures. A good budget helps you pay for the things you need to pay for, as well as help you purchase the things you want. Needs are necessary or required things and include items like rent or mortgage, utilities, car payments, insurance, and more. Wants are things you desire, but do not need. Wants are things you set your goals for.

Of course, deciding what you want is key to developing your goals. For some people, deciding what they want is easy, for others it takes a great deal of thought. Once you know what you want, you’re on your way to creating a good budget—miss this important step and you may find budgeting a frustrating process. Budgets not based on personal goals are often doomed to failure. Your goal could be purchasing your first car, buying a home, building a retirement account, or paying down debt. Or maybe you are starting over and want to develop a plan that actually works.

Since goals are the foundation of creating a good budget, you’ll want to remember a few things as you get started. First, keep in mind that your goals should be flexible. What you want today may not be what you want six months from now, or even two years from now—that’s okay, as goals can and will change. It’s a bit like taking a trip and planning to go sight-seeing—you may have initially planned to go one place, but along the way you see another destination that’s more interesting. Give yourself the freedom to let your goals take you somewhere new.

Second, goals should be personal to you and your family. Focus on setting goals that can make your life better, not on those designed to keep up with your friends and neighbors. Your joy and sense of accomplishment of reaching a goal will quickly fizzle if you’re trying to please or keep up with other people. A boat purchased because you and your family love the outdoors is far more likely to get used than a boat purchased because your neighbor also has a boat. Why set a goal to buy or do something if it isn’t what you truly want?

Third, you’ll have more success in reaching your goals when you can make them specific. If, for example, you would like to retire early, you need to determine what’s early—40, 55, 60 years of age. Then you can create a plan to help you reach retirement at your targeted age.

Depending on your personal situation, you may wish to do the following exercise by yourself, or you may also want to enlist your partner or the entire family in the goal-setting process. Get a 3x5 index card and write down three things that you want. For the moment, assume that these three things have a monetary cost associated with them and write down something you want that is under $500, something that costs between $500 and $2000, and finally something that is over $5000.

My Goals



Under $500:


New stereo


$500 to $2000


New laptop computer


Over $5000


New car that gets good gas mileage


If you’re feeling overwhelmed at the prospect of making your own list, consult the ones that follow for a few ideas to help get you started.

Possible goals that cost under $500: clothes, a bicycle, a television, stereo, digital camera, musical instrument, a swing set for the children, outdoor furniture, a savings account with $500 in it, a weekend getaway.

Possible goals that cost $500 to $2000: a vacation, big screen television, fitness equipment, a fence for the yard, jewelry, camera, computer, a savings account with $2000 in it, furniture, pool table, a new set of golf clubs, season tickets to your favorite professional sports team.

Possible goals that cost over $5000: a car, a house, a college education, trip around the world, a boat, a motorcycle, a recreational vehicle, a savings account with $5000 in it, a retirement account with $25,000 in it, antiques, hot tub, pool, a kitchen remodel.

By deciding what you want, you have already set specific goals. You wrote it down and you assigned a dollar amount to your goal. The very nature of the categories by dollar amount led you to set short-term, mid-term, and long range goals. Based on the items in the example list, buying a mountain bike is a short-term goal, because it falls in the under $500 category. Perhaps you want a more expensive bike, so buying a bike could become a mid-term, or even a long-term goal.

Not all goals will fall within these categories. Feel free to include other goals you would like to achieve. Your goal may be to pay all your bills on time, to be debt free, find a new job, spend more time with your family, take a painting class, learn more about investment options, or to help others by volunteering at your church, community non-profit organization, or hospital. These are all great goals and are perfectly acceptable to appear on your list.

Even with non-monetary goals, it is important to be specific. If your goal is to spend more time with your family, how much more time a week will you set aside for this? What types of activities would you like to do with them? Will you need to rearrange your schedule?

My Goals



Under $500:


Pay all my bills on time to avoid late fees
Pay off my Visa bill $450
Take a painting class $50


$500 to $2000


Pay off my MasterCard bill $600
Save $1000


Over $5000


Buy a new home


No matter what your goals are or the cost associated with them, writing them down can become a way of keeping you on track, especially if you make it a point to carry your goal card with you. Try putting it in your checkbook or wallet, so every time you spend money, you become conscious of whether or not the expense is going to bring you closer to or further from reaching your goals.

And while others may be aware of your goals and perhaps even involved in the process of helping you achieve them, it’s advisable to avoid sharing your goals with people who might discourage you. Unfortunately, you may have people in your life who have told you that you’re a dreamer and are never going to get what you want. They’re the ones telling you to stay in the dead-end job you hate, even when you might be happier elsewhere, or the people who tell you that you simply don’t need a new car and shouldn’t be looking to buy one. These people have no business seeing your goals. Don’t let negative people drag you down or make you feel that you should change your goals. On the other hand, share your goals with those who will support your efforts. It never hurts to have someone cheering you on.

Is it really that easy to set goals? Should you get out a planner with goals and dates and timelines and methods? You can if you want to, but goal setting really can be as simple as writing down what you want. When you keep the process simple, you are more likely to follow through.

Studies prove that setting goals helps you focus your energies and motivates you to achieve results. For over 35 years, Professors Edwin Locke and Gary Latham have studied the power of setting goals, concluding time and again that people who set goals actually achieve them.

In his book, Psychological Foundations of Success, Stephen Kraus outlines five characteristics that successful people have—vision, strategy, belief, persistence, and learning. By writing down what you want, and carrying the card with you, you have established your vision, have made clear that you believe in your goals, and are learning to become focused and persistent.

You really have nothing to lose and everything to gain by trying this. Commit to carrying your goal card for a year, as Barbara did, and see what happens.

Barbara had long been setting and achieving career goals, but had never taken the time to set any personal goals. After some thought, she came up with several things she wanted, wrote them on an index card, and tucked the card into her wallet.

At first, when Barbara got a glimpse of her goal card when she was shopping, she would embarrassedly tell the cashier she had grabbed the wrong item and that she did not want it. At other times, she found herself walking around in a store with an item, arguing with herself. Did she really want the item, or did she want what she had written on the index card more? Eventually when Barbara found herself tempted to impulse buy, she would pull out her goal card and review exactly what it was she wanted. This gave her the opportunity to decide if the purchase she was making would help her to reach her goals.

By using this technique to keep her focused, Barbara was amazed to find that she had reached three of her short term goals, one of her mid-term goals, and was making progress on her long term goal—all within the first year of having set them, while still paying for all of her needs.

Why did Barbara initially resist setting personal goals? She confessed that she felt as though setting a goal and writing it down as a means of achieving it seemed too simple. Why would writing it down make a difference?

Barbara has been using the goal card technique for the past five years, and in that time, she has paid off her credit cards, remodeled her kitchen, purchased a new car, and is putting money in her retirement account. Barbara’s goals now include traveling for enjoyment.

Sometimes Barbara chose to make purchases, even after she recognized that they wouldn’t help her to achieve her goals. The point for Barbara, however, was that she became conscious of what she wanted and how she intended to get it.

What will happen if you choose not to write down your goals? Is there anyone out there that will achieve your goals for you? Is it anyone else’s responsibility? Does anyone else care if you reach your goals? Is it the responsibility of the government, your employer, the advertisers, your parents, your teachers, or your neighbors? Goals are personal, and you and you alone are responsible for achieving them. And you will reap the benefits.

Once you establish what you want, you need to have a plan. That’s what a budget is, a plan to help you get what you want. A good budget will take the stress out of managing your money and will change with you as your life and goals change. In the next chapter, you will learn how to incorporate your goals into a plan to help you get what you want.

Chapter Review

  • The key to getting what you want is having a working budget. Just as a business operates within a budget, so should your household.

  • Your budget will work if it has a purpose. Reaching your goals while paying for your expenses is the purpose of your budget.

  • Put your goals in writing to help you stay focused.

  • Use a 3x5 index card, called a goal card, and write down at least three things you want. Carry your goal card with you at all times.

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