I started working at my first full-time job on November 12, 2019. 

When I got that job, I was super stoked because it was my first big-girl job. 

I was finally #adulting.

More than anything, though, I just wanted the money. Afterall, it was going to be my first time making more than $8,000 per year.

I’ve always been a budget freak, so I spent the week prior to plan my financial goals for 2020.

Setting Financial Goals 1.0

I had too many ideas floating in my head, so I sat down and started typing out all the financial goals I could think of. 

My list ranged from saving $5,000 into my savings account to saving $300 for the Cricut machine that I’ve been eyeing for a while.

As for you, your financial goals can be anything that you want.

I am a very ambitious person, so I ended up with a long list of 15-20 goals. I thought, “How should I go about narrowing this down more?”

So, I asked myself these questions to help me figure out which ones to focus on:

• How important is this to me?
• Do I want this or do I need this?
• How will this affect me in the long-run?
• Is there an immediate need to start saving for this?
• Is this related to any long-term goals that I have further down the line?

After all my brainstorming, I landed on these three because they were super important to me: 

1. Max out my 401(k).
2. Save $7,000 by the end of 2020.
3. Save $2,800 into my savings account by the end of 2020.

But, I realized that as much as I want to put money away, I also need to be realistic because I have needs and wants—and they require money.

These were not realistic. So, I set out to recreate them again.

Setting Realistic Goals

How did I know these weren’t realistic goals? Here’s how.

I make $44,224 per year.

In 2020, the max contribution to a 401(k) that anyone younger than 50 can contribute to was $19,500.

If I add up all the numbers above, that means I will be saving $29,300. In other words, I will only have access to $14,924 per year to spend on my wants, needs, and bills.

Here’s the math: $44,225 – $29,300 = $14,924.

Was this realistic? 

It could be. 

But then I realized that this amount didn’t even factor in taxes. If you’re interested, I use this really cool online calculator from Smart Asset to help me estimate how much I will take home after state and federal taxes. 

Not much is all I can say.

So back to the drawing board I went.

Setting Financial Goals 2.0

This time, I set a realistic goal. 

Instead of maxing out my 401(k), I instead opt for a number that I was comfortable with.

After doing more calculations, I settled on three financial goals that still allow me to have money leftover each month to spend on my wants, needs, and bills. 

Here are my revised goals:

1. Save $14,519 into my 401(k).
2. Save $7,000 by the end of 2020.
3. Save $2,800 into my savings account by the end of 2020.

What’s My Progress Like So Far?

I am proud to say that although I am not going to be able to achieve any of these, I am darn close!

Here are my progress reports as of November 22, 2020:

1. $12,913 of $14,519 contributed to my 401(k). 
2. $5,774.72 of $7,000 saved.
3. $1,307.27 of $2,2800 saved.

Again, I make $44,224 per year and I set these goals exactly a year ago. Pretty darn good, amiright?

So, How Did I Do It?

It’s not how I did it. 

It’s why the plan worked. So, the title should read, “So, Why Did it Work?”

The answer is because I was being real with myself. In my case, being real with myself means:

• Knowing that I want to save money first and foremost and I need to prioritize this
• Knowing that while I want to save as much money as possible, I also want to have money left over to spend on whatever I want

These are just a few examples. If you want to set financial goals that work, you need to be realistic and real with yourself. 

If you have never saved money before, don’t make a goal that says, “I’m going to save 90% of my paycheck and spend only $20 on groceries each month” when you clearly have been eating out every weekend.

Instead, choose a goal that compromises the two.

In my case, I want to save lots of money, but I like to have spending money each month. So, I made a plan where every month, I have $800 leftover after the money has been put into my savings account. 

I then use this $800 to pay off my bills. Whatever was left over, I put it into a personal spending account where I could use it on whatever I want.

Guilt free.

This was how I was able to control my shopping urges and not feel guilty about spending money I earned. 

Was this helpful? How are you managing your finances in 2020? I’d love to know, so comment below!