Episode 63 - Why are Big Goals important?

We need big goals! When goals are big enough, they drive us forward. Let's discuss how.

Transcript

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Paul, Welcome to Catholic money talk, where we talk about all things money and finance, and we try to do it through a lens of being Catholic, where our ultimate goal is to one day be in Heaven with the Lord. I am your host. Paul Scarfone, thank you for being here today. Thank you for joining me today on Catholic money talk. On this podcast, there's several different episodes where we discuss how to set goals, but today I want to talk about why. Why do we need to set goals? Why do we need to set big goals? But before we do that, let's say a prayer in the name of the Father and of the Son of the Holy Spirit. Amen, Heavenly Father. We thank you for this day. We thank you for all the ways that you love and bless us. Lord. We know that you have an awesome plan for us. Just fill us with great confidence in your love and confidence in your will for us. Lord, fill us with your Holy Spirit. Please help us to weather any storms we might be weathering, Lord, to handle whatever situation we might find ourselves in. We know that you love us and that you have a great plan for us. Inspire us to hear your words and to heed your promptings. We ask all this through Jesus name amen, and name of the Father and of the Son and the Holy Spirit, Amen. So why? Why are setting goals so important, but not just like setting arbitrary goals? Why is setting big goals so important? Recently I I met with a couple, and it was our first appointment, and I asked them like I asked all my clients, so why'd you reach out to me? And they said that they just weren't where they thought they'd be. I asked them to explain. They told me that they had really hoped that they would have saved more money than they have at this point in their life. And I asked them, was there a moment in your lives when you were happy with the amount that you were saving? And they told me, yes. They told me, years ago they were saving to buy their first home. They said that when they were saving to buy their home, they made sure that there was a certain amount of money that went to savings each month. They would put any extra income they received into this home savings that they were building. I asked them why they were so focused on putting money into the savings. They said it was because they really needed to buy a house. They had been living in a small apartment, and they were expecting their second child, and they told me that at that time, it was their top priority. They had a clear goal, and they were going after it. They thought about it a lot. They spoke about it a lot. It was always part of the conversation when they were making other financial decisions. I then asked them, what's the difference from then to now? They looked at me, and they had a small grin and said, Yeah, back then we had an important goal. That's probably our problem. I remember they looked at each other, we don't have a goal to be saving for, they told me, and that's exactly the challenge, I told them, without an important goal to be saving for, it just doesn't present a big enough reason to make sacrifices or really to push forward for a specific desire. We need something big and exciting enough that will prompt us to say no to certain things so that we can say yes to the big goal. The goals we set. Your goal has to be big enough that you're willing to say no to other things to make it happen, if it's mediocre or even worse, sometimes it's not even your goal, right? Maybe it's just something we heard that makes sense, it's harder to make it a priority. You really need to own the goal. So what do I mean? Sometimes we have blah goals, right? They're just pedestrian, just a target for certain things, and we haven't really prayerfully discerned them or made them our own, for instance. And this comes up a lot. Let's look at retirement savings. Every now and then I'll be speaking with someone, and they'll bring up retirement savings. They'll tell me something like, you know, saving for retirement is a goal of mine. And I'll ask them, Well, how much are you saving? What's the number you need to hit so that you know you have enough saved for retirement? When do you plan to retire? Right? I'll bombard them with some of these questions, and I get different answers. Sometimes I'll get the response like they put the amount into their 401, K to get the full match from their employer, right? And I hear that I've been in that spot myself years ago, one of my employers, when I was working at one of the banks, they gave $1 for dollar match on the 401, k up to four. Percent of your salary. So I put, well, sometimes I would put 4% into my 401 k because I wanted to get that full match. It seemed like the smart thing to do. But then every now and then, when I needed more money in my checking account, due to my lack of budgeting and planning, I would pause the 401 K contributions. So it wasn't that important to me, right? It really wasn't mine. I just did it because I thought it sounded smart. And I've also spoken to people who have some, you know, not totally arbitrary number of retirement savings, like, like, I've heard things like, pay yourself 10% first into retirement. I've also seen people who follow a plan that includes a formula for saving for retirement at 15% annually of their household income. And again, these are smart ideas, and they can be great plans, but success comes from having a solid commitment to the plan. It must be your goal. You must understand how it fits in with everything else, the more you understand your goal, the more you make it yours, the more you'll actually execute a plan that's going to help you to head in the direction that you're trying to get there and and knowing all of that, putting it all together, connecting all these dots, it gives you more confidence. And so having big goals, having big goals is important to make sure that will make it a priority and that will sacrifice those lesser things to make the big one happen. I've also had other answers from people too. I remember one fella who told me he maxed out his 401, K every year. I asked him, Why was there an amount that he was saving for or an age he wanted to retire? By His answer was that his theory, this was his theory, that you could never have too much save for retirement. So clearly, this was his top priority. And I'm sure there might have been other areas of his life, you know, financial life, that could possibly have gotten a little bit more attention, if he was milling, willing to make space for them, but clearly his top priority, his main goal, was retirement, and he was pursuing it. So having something big and exciting that we're in pursuit of, it's so important. And you know, sometimes, sometimes it might not be something big and exciting, but more of just the relief of a particular pain or the relief of stress. So, and this is, this is my story, right? And I've mentioned parts of this before, but I really want to focus on the vastness of the goal, right? So the first big goal that Taryn and I, Terrence, my wife, that her and I made together was to get out of debt. So we had been married 10 years. It was back in 2013 we were living paycheck to paycheck, and six months prior to that, I had just finished my MBA, and so six months after you're done, I received a notice from the student loan company that I had to start making payments on my $40,000 of student loans. Things were already tight, and adding a over$600 monthly payment on top of everything was overwhelming. Like the math didn't work, and I was freaking out. There was no way we could do this. That's when I started asking people I worked with in the bank like, how their friend their financial picture was. Most were paycheck to paycheck, and they were deploying the strategy that I'd been using my whole life, and that was to just try to make more money, and hopefully the financial stress will go away, trying to out earn my financial challenges again, just thinking if I only made a little bit more, my problems would start to go away. And I'm not alone on that. There's so many people. I'll take calls and conversations this week from people, and that's their main problem. Oh, if I could just make a little bit more, oh, if I could just get a bigger job, my boss would give me a raise, like, I'll be fine. I'll be fine. No, right? It's setting big goals and having a commitment to them so I could see that it wouldn't be fine if I made a little bit more at the time in 2013 we owed $82,000 so that included my student loans, two car loans, a personal loan, a credit card balance and a home equity loan, the total of those monthly loan payments was 1800 and this was on top of our mortgage. Everything was so tight. I started reading and learning a lot about finances. Now, again, I had worked in a bank, but clearly what they had taught and a lot of their philosophies weren't working right? They worked really well for the bank to be successful make money, but they didn't work for me, and so I started reading more other things right, and learning and asking questions, asking people who were wealthy and didn't have debt, asking them questions and how to handle everything. So. The more I read, the more I learned, the more I realized there were so many things that Taryn and I we weren't doing. We weren't saving for emergencies. Every time we had an emergency, we went further into debt. We weren't saving for large purchases. When we needed to make purchases, we typically sign up for financing, whether it be to buy an appliance, furniture, cars. We weren't saving for retirement. We weren't saving up for home improvements or another future home and when I looked at why we weren't saving it was because all of our income was going out in the form of loan payments. And savings hadn't been a priority to us, right? But it was all going out in form loan payments. And so as we started to figure out what we needed to do. It became crystal clear that we needed to eliminate this debt and never go into debt again. So paying off the debt became our top priority. We set up a plan to attack the debt with a vengeance every month. We created a new budget that attacked the debt whenever we had a few extra dollars, we threw it at the debt. When I would get quarterly bonuses, we'd throw them at the debt. We started eliminating others expenses that weren't needs to be able to throw more and more money at the debt. We were saying no to lesser things so we could say yes to throwing more and more money at the debt. An example, we didn't go out to dinner unless we had a coupon or a gift certificate, we were asking family when they'd say, Oh, what do you want for you know, my mother in law, what do you want for Christmas? Oh, we'll take a gift card to a restaurant. Otherwise, we weren't going to go. We didn't go on vacation for years. We didn't go on vacations. Instead, we would just visit family and crash at their house and eat their food. But slowly and surely, the debt started to be eliminated. The more we gave up and said no to other things in the pursuit of our goal. It made us work harder at attaining our goal. I remember when we were kind of working this plan, we gave ourselves a treat in the middle of paying off our debt to celebrate being halfway to goal. It was in 2016 we're halfway done. So we're like 41,000 mark. It might have been the 40,000 mark. Actually. We took a month off of throwing everything extra at the debt, and instead, we bought plane tickets to go visit my brother's family in Minnesota for Thanksgiving. That was a great fun treat, and it was a great way to celebrate a milestone. But after that, we got home and we had to get back at it. The kids knew what we were doing. Everything we did, all of our decisions were in this perspective of that big goal to pay off the debt. And when you feel the pain, that's when you know you're making headway. So saying no to vacation was a good pain. See, we didn't we didn't want to not go on vacation forever, right? So we promised that once the debt was paid off, we would go on a nice vacation with our kids. And in 2018 we paid off the debt, and we took the kids on a vacation to Maine. Were able to rent a home right in a scenic downtown. We were able to walk to ice cream every day. We got to eat out. We had an absolute blast. And I think the best part was because we had eliminated all of our debt, and the trip was paid for in cash, and it was great. And that's what started the next chapter for Tara and I it was then discussing goals and prioritizing them and getting after them. And again, once the debt was paid off, that income that had been used to pay off the debt, not just the $1,800 a month, but all the extra we had thrown off of that thrown after after the debt, thrown at the debt, all that money, the 1800 a month and the extra, all of a sudden, was available to use towards other goals. And I've said this before, our current big goal in front of us, it's paying off the mortgage, and I can't wait to see what our goal is after that. I mean, you know, currently we talk about things. We want to replace some cars, you want to do some landscaping, want to travel, maybe go on a pilgrimage, and and all this, we say, and Taryn says it very quickly. Well, we can do that once the house is paid off, right? And this keeps our goal front of mind. And the closer and closer we get to it, the more exciting it becomes. See, when we bought this current home that we're in 2018 we had planned to pay it off with a 15 year mortgage. Now, we're six years into this home, but we've less than five years left on the mortgage, right because we've been paying more and more and at the rate that we've been paying for the last two, two and a half years, I think we could possibly eliminate this in under two years from now, and we are pushing hard, I know, actually, even, in fact, saying that. I've said that to some people now, saying it on the podcast right now, there's more accountability, right? Taryn is going to listen to this in a maybe a few days or a few weeks, and she's going to be like, Oh, so you did say we can probably get after this in under two years from now, and we can, because we're focused on it. Big goals are. Awesome. We need them to drive us forward. They need to be big. They need to be our own. We can't take someone else's goals. It needs to be specific to us. Without goals, we're just going to flounder or meander slowly through life. You know? It's unlike the ultimate goal that we all have right as Catholics, our ultimate goal is to get to heaven. Do we sacrifice to move towards that goal? Do the decisions and choices we make just radiate our goal of getting to heaven? Is it the framework the lens through which we make all of our other decisions? Is it so great that we say no to lesser things that get in the way of us achieving it? Heaven is the greatest goal. It's why we were created. You know, I tell people that their budget should reflect their goals, right? If someone were to look at your budget, would they be able to identify what your goals are? We should ask the same thing about our lives. Do our lives reflect that heaven is our goal, that we are living for heaven? If someone looked at our lives, if someone looked at my life, would they be able to clearly see that reaching Heaven is my top priority? I pray that we may all have the clarity and confidence to pursue our goals, that they are prayerfully discerned, and not only move us towards our earthly goals, but also move us towards our heavenly goal of living with God forever in heaven. So that's what I have today. Why having big goals are important. I hope this has been helpful. Thank you for joining me today. God bless. Thank you for listening to Catholic money talk. I hope you join us again next time, please click Subscribe on your podcast app to get notified of new episodes. God bless you and have a great day. You.