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    3 Strategies to Meet Your Financial Goals

    Many of us get stuck when we think about making smart financial decisions in the present to prepare for some imaginary future. It’s perfectly normal—research shows that our brains look at our future self as a stranger. And who wants to give up fun now to benefit a stranger in the future?

    C’mon. Don’t fool yourself. If given the opportunity to buy that new car now or give a new car to a stranger in 20 years, which would you choose? Most of us would choose the new car now. In fact, studies have shown that when people are given the choice to receive an amount of money right now, and more money in the future, they typically choose the lower amount of money.

    So if this concept, called present bias, is a known problem when it comes to money, what can you do about it? Thankfully, there are a couple of really good strategies to help.

    3 strategies to meet your financial goals

    1) Imagine Yourself In The Future

    Research has shown that looking at an age-adjusted picture of yourself can help you make better decisions today. The picture seems to bridge the gap between your present self and that future stranger.

    If you’re handy, you may be able to use an app or photo tool to accomplish this goal. But for many of us, it’s easiest to look to our parents to imagine what we might be like in the future. You may not want to listen to Mom or Dad’s actual financial advice, but maybe imagine what you think they’d tell you to do. It’s a good tool to predict some things about your future self.

    2) Map Your Goals

    Another way to tie your present self to that future stranger is to create goals. Where do you want to be financially in 10, 20, 30 years?

    Goals have been a powerful part of our financial success. When we first got married, my husband and I had a lot of debt. We made a goal to pay off all of our debt before we had our first child. That goal made it easier to stick to our spending plan, forgo spending, and make smart decisions. We paid off my final student loan about four months before our first baby was born.

    To me, the most interesting part about that story isn’t that we made a goal and stuck to it. I think the interesting part is how fast we were able to lose our good habits once that goal was accomplished. Once we accomplished that goal, we didn’t set a new goal, and our finances sort of wandered for several years. It wasn’t until we set a new goal that things got back on track.

    Identify two or three goals that really resonate with you. Maybe you want to have a down payment to buy a house, buy a bass boat, or make sure that your kids will never have to support you financially. Every goal is a good goal as long as it gets you started!

    Happy young couple calculating bills at home-3Image from Shutterstock

    3) Make It Automatic

    Once you’ve identified those goals, automate them. Set up automatic contributions to your Thrift Savings Plan account and savings accounts. Program your thermostat to adjust (just a degree or two) for times when you are not home. Change your monthly bill paying on credit cards from the minimum payment to a set amount to accomplish you goal. Avoid late fees by setting up auto-pay on your bills.

    Automating your goals increases the chances that you’ll meet those goals. Plus it makes your life easier. Win-win.

    Present bias is a real thing, and it’s a big problem in personal finance. But using these three strategies can help you overcome present bias and move forward in a way that will make that future stranger happy.New Call-to-action

    Kate Horrell


    Kate Horrell

    Kate Horrell is a military spouse and expert in the personal financial issues facing military families. During her husband's active duty service, they've bought several houses and been landlords for over 20 years. Her passion is helping military families make the most of their pay and benefits. Find more from Kate at her site, Kate Horrell: The Military Finance Coach.

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