How to Break Down a Big-Picture Finance Goal

Of all the goals you might have set this year, a personal finance goal might seem the most intimidating. Maybe it feels so big—so important!—that you're worried about getting it wrong, or can't figure out where to start. Maybe you feel like you know so little about money that making progress feels impossible. Friend, you're in the right place!

Around here, we love big-picture goals like "achieve financial security"—they're inspiring and motivating. Setting a big-picture goal also gives you the flexibility to work toward something that really matters to you in many different ways over the course of the year. It allows you to redirect your efforts when unexpected things happen. Your action steps might change, but they can still point in the same direction! 

But, if you never break down your big-picture goal into actionable steps, it's unlikely it will go anywhere. That's why it's SO important to break your big-picture goals down, especially your personal finance goals!

First, let's remember what we already know about making progress on goals. We break our big goals down, and then we break them down some more. Finish Line goals and action steps help keep us motivated. When we break our big goals down into smaller and smaller chunks, it’s almost impossible to NOT make progress. That momentum builds, friends! To demonstrate, here's how you might feel when you sit down to work on your goals:

You see: Achieve financial security
You ask: Can I take action on that today?
You think: Eek, feels hard. Not sure where to start. Let's try again tomorrow.

OR

You see: Set up an automatic transfer to my savings account.
You ask: Can I take action on that today?
You think: Absolutely! Let's do it!

Breaking down your goals becomes even more important when we're talking about personal finance goals because so much of the progress is tiny and hard to see. If you've broken your goal down into action steps and Finish Line goals and tracked your progress along the way, however, you'll easily be able to look back after a month or a year and see all the ways your financial picture has improved. Little-by-little progress adds up and is worthy of celebration!

Having a hard time coming up with action steps? Dream about what success for your goal looks like at the end of the year, and then fill in the space between that vision and where you are now. We also have tons of resources across the Cultivate site, as well as in the PowerSheets Facebook group, to spark ideas!

Here are a few of the most common big-picture finance goals, and easy ways to break them down:

Establish and stick to a budget

• Calculate your monthly net income (your gross income minus taxes). For most of us, this is simply our paycheck.
• Add up all of your fixed expenses. Fixed expenses are difficult or impossible to change and are the same (or roughly the same) every month: rent, utilities, your electric bill, student loans, car loan(s), auto insurance, health insurance, etc.
• Calculate your monthly contribution to your financial goals. 
• Add up all of your variable expenses. Examples include groceries, dining out, clothing, entertainment, gifts, travel, gas, personal care, etc.
• Put it all together. Subtract your fixed expenses, your contributions to your financial goals, and your variable expenses from your net income, then adjust numbers until they come out roughly even. 
• Choose a budget-tracking system. A spreadsheet like Google Docs and online systems like YNAB or Monarch Money are popular options.
• Give yourself reminders to check in regularly. Jot notes in your planner or create digital reminders on your phone.

More on building a budget here!

Save for a down payment or other large expense

• Determine how much you'd like to save for the down payment or purchase and get clear on your deadline, if applicable.
• Using these details, figure out how much you'll need to save per year, and per month. (Free online calculators can help with this!)
• Examine your budget and see what might need to shift to accommodate this savings priority.
• Set up automatic transfers of your contributions to make saving easy.
• Brainstorm ideas to bring in more money to move you further, faster, toward your goal.

Pay off debt

• Determine your why. Paying down debt can be a long slog, and it's really important to get clear on why it matters to you.
• Create a budget that prioritizes debt payments.
• Automate payments. Sign up online for a monthly auto-debit for each of your accounts so that you're never late with or forget a payment. 
• Commit to rerouting extra dollars. Decide in advance that, as far as possible, every time your budget expands you will allocate the extra dollars toward debt reduction. Raise at work? Going toward debt. Bonus? Going toward debt. 
• Get a little crazy. Are you willing to trade a little freedom now for much greater freedom in the future? Consider working extra hours, starting a side hustle, downsizing to one car, or something else “extreme” in the name of moving the needle a little faster.
• Roll the snowball. Pay the minimum amount on all of your debts except one and then throw all of your other available resources at that one. Once that debt is paid, immediately move the payment for that debt toward another and so on until all of the debts are paid.
• Track your progress. Use the Finance Workbook or keep a Google Doc spreadsheet to list your debts, the current amount you pay per month on each, the outstanding total of each, and the month the last full payment is scheduled. Every time a payment processes, go in and update the numbers. It is extremely motivating to see them shrink over time!

Save for my children's college expenses

• Research the pros and cons of different state 529 options.
• Talk with your spouse or child, as applicable, about how much you'd ideally like to contribute to their college expenses.
• Consider how much time you have until your child heads to college and how much you'd need to save per year. (Free online calculators can help with this!)
• Examine your budget and see what might need to shift to accommodate this savings priority.
• Set up automatic transfers of your contributions to make saving easy.

Teach my children about money

• Jot down a list of the ideas and topics you'd like your children to understand — perhaps broken out by age.
• Think through your preferred way of teaching: dedicated, regular sessions each week, month, or year? Casual conversations sprinkled into everyday life? Topics pegged to milestone birthdays?
• Embrace the idea of ongoing learning and set a monthly action step of engaging your child(ren) in at least one casual money conversation a month in your PowerSheets® goal planner.
• Find a book to read together. This one looks good for elementary girls and this would be perfect for teens.

Grow in contentment

• Begin a simple gratitude practice: writing down five things you're grateful for each evening.
• Implement habits and rhythms to care for what you have —for example, organizing your wardrobe, decluttering a closet, or styling a shelf.
• Give items away, either to donation organizations, a local free gifting group, or to a friend or family member.
• Notice the things around you —the everyday items in your home and in your routines —and share what you love about them with the people around you.
• Purge your social media of accounts that make you feel less than or jealous.

Shop less

• Start a note in your phone or a new page in your notebook and use it to capture every "add to cart" impulse —instead of immediately acting on them.
• Challenge yourself to a certain number of no-spend days, weeks, or months each year. Experiment with general blackouts or abstaining from certain categories, like clothing, household items, or books.
• If there's a certain retailer that's your weakness —Amazon, Target, Sephora —ban it for a certain amount of time. Find alternative ways to get what you need (e.g. grocery shopping at a grocery store instead).
• Commit to waiting a certain amount of time (24-48 hours) before every non-essential purchase.
• Purge your social media of accounts that give you the urge to spend. Unsubscribe from sales emails.
• Complete all non-essential purchases during a certain window each week —for example, Saturdays from 8-10am.

Establish a giving plan and generosity rhythm

• Get clear on your why. Spend some time brainstorming why giving matters to you and what causes and organizations are close to your heart. 
• Audit the amount you're giving currently. If it's not routine or automatic, try to comb through statements from the last year and piece together a picture of your current giving.
• Consider whether your current giving level aligns with your desired amounts and recipients. If it needs some adjustment, consider what changes you'd like to make and what tweaks might be needed in your budget to do so.
• Set up automatic payments to make giving easy.
• Find a way to celebrate your impact visually or relationally. Share the work of an organization you care about with a friend or family member. Hike through a new trail saved by the conservancy you give to. Invite a friend to a volunteer work day. Post a thank you letter on your fridge.

No matter what goal you're working on, remember to take it one day at a time and extend yourself grace. As always, this is about progress, not perfection!

We'd love to hear: are you working on a personal finance goal right now? How have you broken it down?

P.S. Whether you're paying down debt, increasing in generosity, or saving for a large purchase, the Finance Workbook can help! Check it out here.