Being an active blogger brings about many benefits, one of which is the fact that I end up reading a lot of material online and offline and so get to learn a lot of new things. One of the things that I learned this year is about goal setting and making my goals SMART. SMART is a mnemonic to aid in memory (what is the point of a silent ‘m’ in English anyway) and if you haven’t heard about it, I will be explaining it in this post. Later as we get closer to the new year, I will share my actual goals.
S is for Specific
Goals should be specific and not vague. One of my goals for the new year will be to lose some more weight. I have lost about 10 pounds this year and want to get a little bit lighter since I am sure that it will be healthier for me. But it is not good to say I want to lose weight or want to get fit. It has to be more specific than that. The SMART system for goal setting will help. It is better to set a goal of losing 5 pounds or being able to run 2 miles.
M is for Measurable
You have probably heard the adage, “If you can measure it, you can manage it.” I couldn’t agree more. I tend to like numbers quite a bit and being able to measure something usually means a number is involved. Obviously, body weight is pretty easy to measure. Calorie intake can also be pretty easy to measure and track with today’s smart phones. I have an app on my phone where I can track what I have eaten for the day and inform me how many calories I have left for the day to achieve a certain goal. This was one of the tools that I was able to use this year to lose some weight, but I slacked off and stopped losing. In 2012, I have to get better about my level of commitment.
A is for Attainable
The goal has to be achievable. It would make no sense for me to want to set a goal of doing 1000 push ups in a day if I was unable to do even one, or to set a goal of bench pressing 2000 pounds when the world record for the bench press is 1075 pounds. It really makes the goal meaningless and more likely to be ignored than to strive for it.
R is for Realistic
I have also seen relevant as another ‘R’ word. Realistic seems to go along with attainability so I tend to like the relevant term a little better now that I have been reading more about goals and goal setting. For me, losing another 10 pounds in 2012 is both realistic, attainable and relevant. It is important for my health to lose some weight, not simply for weight loss, but because the focus on a healthier lifestyle is relevant to my overall longevity and ability to enjoy life.
T is for Timely
The goal should have a target date. Many of us tend to procrastinate and find other things to do with our time. There are so many activities and things to do in life that it can be difficult to manage the limited amount of time we have and adequately prioritize. If I want to move losing weight to a higher position in my priority list ahead of eating pizza and chocolate cake every night for dinner, then I need to set a time frame for shedding those extra pounds. Leaving an open-ended goal is not really setting a goal at all.
Working on My 2012 SMART Goals
Over the next few weeks, I will be working on 3 main goals for 2012. I have heard it said that it is difficult to manage more than 3 major tasks at one time so I will be sticking with 3 main areas for goal setting as I prepare for personal and financial improvements in 2012. I will then be sharing these with you in a future post in order to establish a level of accountability which is also a vital part of setting goals.
Blogging on personal financial topics has also helped me with accountability and forced me to maintain more focus on my personal finances. I was able to pay off a business credit card this year and look forward to making more progress in the next.
Readers: Are you working on your SMART goals? Care to share any before January?
Tomorrow is Thanksgiving Day here in the United States, and I wanted to take a moment to reflect upon how incredibly fortunate my family and I are. Sure we have a few issues here and there, but for the most part, we are healthy, have food on the table, and a place to stay. My father has Alzheimer’s and is going downhill fairly quickly, but I am thankful for his long life and health until recently. So we will be celebrating our Thanksgiving day with family and enjoying football and lots of food.
Contrast to Honduras
Some of you may know that my college-aged daughter and I recently returned from Honduras where we spent 10 days on a mission trip. I am always struck by the contrast between this Third World country and the United States. The poverty and lack of infrastructure is simply amazing. Here is one view of city:
The mountains are very pretty and the people are nice, but everyday life can be a struggle. There are so many things that we take for granted like our infrastructure. The roads there are full of potholes and have mounds of dirt sitting in them in random places. Manhole covers have been stolen for recycling and the holes have tires in them to warn drivers.
We take security for granted as well. Many businesses have armed guards posted. It is shocking to say the least to see shotgun wielding guards at the Dunkin Donuts. When I first arrived last year, I thought there were a lot of prisons. It didn’t take long to figure out that razor wire was surrounding most of the buildings in the capital.
I was also surprised to learn that there is no mail service in Honduras. Most of the roads are unnamed so it is next to impossible to get a package to someone. Oddly enough, bills for electricity are placed on the door and have to be paid at the banks. (If the bills get delivered, can’t there be mail but maybe I’m missing something.)
I am also thankful for clean water that I can drink. Even the locals can’t drink the water because of the risk for disease. The poorest Hondurans seem to find some method of getting safe drinking water. One of the jobs can be seen in the picture at the left. This delivery method is motorized, but there are several who ride around in bikes delivering bottled water to the various neighborhoods throughout the city. I also found the little half liter bags of water that the kids drank quite fascinating.
Of course if you want to talk about risk when traveling to Honduras, you have to discuss the airport. I have learned that the international airport in the capital city of Tegucigalpa is one of the (if not THE) most dangerous and scary landings for pilots, and thus for the passengers as well.
If you don’t believe me, check out this video of a plane coming in for a landing. I want to know what is up with the people on the mountain?!
After that landing video, you understand why it is that I make sure that all my insurance coverage is up to date. I want to make sure that if anything happens to me either during the landing or while on the ground in Honduras that my family is well cared for. I always like to joke that I am worth more dead than alive, but for the next several years, it is a true statement.
Now life insurance isn’t the only insurance that I carry. Being in the United States and having many things and responsibilities means that I also carry disability insurance to protect income in the event of illness or injury and home owner’s insurance to protect property. Other types of insurance that should be considered are a liability umbrella policy and even professional liability insurance if you are in a higher risk profession.
Taking Stuff for Granted
I am incredibly thankful for being born into a wonderful country with plenty of opportunities for those who work hard. I am thankful for my health and my family. I am thankful for the safety and security and ease of travel in the United States. There may be problems in our country right now, but things could always be worse and I don’t want to take anything for granted.
So this Thanksgiving Day, for what are you thankful?
My wife and I are going on a cruise at the end of this month to help celebrate a friend’s 50th birthday. This was decided in February, and so at that time I decided that I wanted to lose weight before leaving. I weighed 218 pounds at the time and wanted to lose about 30 pounds or so.
I did well for awhile but during the summer months got stuck at 208. I can tell you that it was because I stopped counting my calories. In the spring, I was using an app on my phone and tracking every calorie I put in my mouth. I was diligent and did not go over my 2,000 calorie allotment. As I lost weight, however, I thought that I could figure it out on my own. Yeah right. You know how that ended up.
I met with my trainer on Saturday and told him my renewed enthusiasm for getting down to 200 pounds by the end of the month. I told him I had stopped tracking my calories which was the reason that I had been stuck for a few months but that now I had to limit myself to 1500 calories per day. He wisely offered me what I consider the quote of the year if not longer:
“When we stop tracking, we start slacking” —Vee Furgeson
One time each week, I spend 20 minutes with Vee doing about 5 or 6 exercises in a high intensity training fashion, meaning that each repetition is designed to take from 20-30 seconds in a controlled fashion. The exercise is completed to failure which should take from 1-2 minutes and then you move on to the next exercise.
Vee and the other trainers keep a record of every exercise their clients have ever done with the weight and time. For me, that is about 6 years worth of data. I can look back to see that I started the leg press at about 200 pounds and am now at 625 pounds. Each week, I look at my time from the previous sessions when I did that particular exercise and try to beat my time if only by 1 or 2 seconds. Eventually, Vee will add 2.5 pounds to the exercise and I will establish a new time for the new weight.
The bottom line is that Vee knows tracking. Here is Vee doing some high intensity training:
So what does this have to do with finances? Simple. If you are not tracking some measure of fiscal fitness then you are slacking and not getting the biggest bang for your buck. A dollar here and a dollar there will add up just like those calories did for me when I got stuck at 208 pounds.
Various Fiscal Numbers to Track
Here are several ideas of measurements that you can make regarding your finances that will allow you to improve upon your financial situation.
- Spending–If you are just getting started in your fiscal fitness, then you should really be tracking spending. It is impossible to improve anything without knowing where your money goes each month. I will be tracking spending by only spending with a debit card and limiting the amount of cash that will be allowed each week.
- Income–Of course it is always useful to know how much money you make each week or month, but it can be especially useful to track income from a side income like blogging. It can also be useful when trying to grow passive income like dividends from stock investing to set a goal and strive to achieve it.
- Cash Flow–Combine income and spending into a monthly spending plan (budget is a dirty word) and you can track your monthly cash flow. You want that number to be positive on a consistent basis to use that excess cash flow for investing in assets or paying off liabilities. If the number is negative, then it is time to decrease spending or increase income.
- Net Worth–Net worth is the sum of all assets minus all liabilities. It is a nice number to know. If cash flow is positive month after month, then net worth should be growing. It is possible, however, to have a positive net worth and a negative cash flow. Of the two, I think cash flow is more important.
- Debt–I included this as its own category because it is very important to monitor and track debt. I have done this over the years but haven’t been as diligent about eliminating it just like I have been weighing myself and knowing my weight but doing little about it. Ultimately, it doesn’t work. I will begin targeting specific debts with the goal of eliminating them for good.
- Return on Investment–This is great information to have especially when deciding what to do with excess cash flow. Should you pay off debt or buy some real estate? What about investing in stocks? Is the return guaranteed or is there some risk involved? Knowing the expected cash on cash return on investment can help make those decisions easier. It can also help if you know your track record of making these decisions in the past.
These are just of few of the financial numbers that I think are important to track and use to set goals for improvement. It is certainly not all of them. I will be focusing on increasing my tracking of several of these numbers over the next 15 months to see what I can accomplish. I will be sharing from time to time on my progress as well to maintain some accountability.
Readers: What fiscal measures do you use to track your progress? What other measures would you add to the list?