Adding One Big Goal Mid-Year Can Have Surprising Results

The half-way point of the year is a perfect time to add a goal or wish to your financial plan.

Adding a major goal mid-year will often create surprising results in your ability to achieve that one major goal. When you budget at the beginning of the year, you are balancing a large number of goals. With so many trade-offs and things to fund, it's easy for it to get overwhelming. As a result, the biggest goals in our lives are often the most likely to get cut during the budgeting process because they seem, well, just too big.

But at this point in the year, all those other budgeting distractions are gone. Being able to focus on that one goal alone can provide immense clarity on how to rework your finances to fund the goal.

Do Something Big!

Look through your goals (or brainstorm new ones) to identify one goal that you eliminated because you thought it was too big to accomplish. It could have been starting to save for a down payment, upping your retirement savings from 10% to 15%, taking classes to advance your career, taking a big family vacation, or starting a side businesses.  Choose the one that you are the most excited for. The one that was most disappointing your couldn't fund. The one that would have the biggest impact on your life if you were to accomplish it.  That's the one you're going to figure out how to accomplish in the last six months of this year.

Achieving the Goal

Start by researching the total cost of the goal and how long you have (in months) until you want to achieve it. Then divide the cost by the number of months.  If the goal is a $60,000 down payment on a house you'd like to buy in 10 years (120 months), then you'll need to save $500 per month to reach that goal. Next, you'll want to open up a savings account for the goal so the money you save has a home until you invest it.

The real number is closer to $400 when you factor in inflation and investment growth for investing the money into assets appropriate for a 10-year time frame.

Find Room for the Goal in Your Budget

With an exact monthly figure, you can now start the real work of finding how to fund that money every month. One of the first places to look is the money you saved from scrutinizing all your monthly service providers. Diverting some of those funds into your new goal can go a long way toward paying for it.

To get the last bit of the goal funded, look toward all your other budget items. What areas can you cut back on in order to fund this goal, but try to avoid cutting from other savings plans to keep your other goals and wishes on track. Instead, look at your monthly expenses and low priorities first.

Partially Fund the Goal

If you can't find a way to fully fund that goal, that's OK. If all you can afford is half the goal, then start funding half the goal. The earlier you start toward a goal, the more time you have for investing to grow your money. Even a small start will make a dent in moving you forward. And when the time comes that you can fully fund the goal, you'll have given yourself a much stronger head start.

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