At the start of every year I make out a list of 4/5/6 personal resolutions that I would like to achieve in that year. I’d be lying if I said that all resolutions are always achieved, but they do give me a guideline to work with. Sometimes, I have to push a resolution into the next year even, but more often than not making that list has a positive impact on the outcomes I wish to achieve and I definitely move in the right direction.

There is something to be said about making lists, it’s almost magical how just writing down things in a list format gives them newfound importance.

After the new year resolution lists, to do lists, shopping lists, travel itineraries and now its time to start thinking about that life and financial goal time line. This is like just another list, except that it’s a very critical one where you will be writing down all those life goals and financial objectives that you want to achieve over the next 10-20 years or more.

If your mind is starting to get cloudy at this point, unable to figure out where to begin despite understanding the importance of this action, then read on and this blog will break down the process for you making it simple and accurate.

Breaking down and writing what your money and life goals are can help you get the much-needed clarity on how to achieve them beyond the matter of financial provisioning.

1. One-time goals

Begin with the large sized life goals. Do you have a vision of what your life will look like post retirement? Where will you settle, the house you dreamed of or maybe the enterprise you always wanted to set up. Only when you visualise will you be able to get closer to achieving what you want. Moreover, you are in a better position to understand the monetary and financial aspects of this goal. Make sure you break it down when you write. For example, retirement is a goal but breaking down the specifics like say buying a house, monthly income, social venture and so on will help you better understand exactly what kind of financial investments you need to start making today to achieve your large one-time goals post retirement.

One-time goals could also be just around the corner like say buying a car. Its true that you will probably buy more than one car in your lifetime, nevertheless, it’s a purchase that is somewhat large and will last you for a few years.

Write down all such goals that will not re-occur frequently and need some financial planning for you to achieve them.

The reason you need to plan is because there is a limited income and a limited pot of money, how you allocate and grow this will determine how successful you are in achieving your goals.

2. Recurring goals

These are usually of lower priority that the one-time goals and as the name suggests, they pop up every now and then. Some recurring goals are critical say like your child’s school fees which comes into play every year and even escalates in value every few years. Your annual or semi-annual travel plans are also a recurring goal which need to be provided for. There could be other smaller goals like wardrobe overhaul once a year or taking on a new creative course once in two years to learn a new skill or repainting the house once in two years and so on. Recurring goals come up every now and then and because they aren’t large in monetary terms, we may over look these goals.

However, when you combine all the various recurring goals, you will have a largish spend for the year. Planning and investing to achieve these goals require a different approach than planning for your one-time life goals where you have a longer time horizon to achieve them.

Recurring goals are equally as important as the one-time goals given that they enhance the immediate quality of life; something we need to focus on just as much as the future.

3. Make your goal time line

Once you have classified the goals as one time or recurring and have managed to attach some financial value to these goals, make a proper timeline with approximate time horizon or each goal. So, your time line for the next entire year will have mostly the recurring goals and then 2/3/5 years apart will come the one-time goals. All you have to do is take a sheet of paper and on the left-hand side write down either the dates or the months to achieve the goal and against that write the goal you seek to fulfil and on the extreme right, write the rupee value you have estimated for the goal.

Just like your new year resolution list, make this goal time line for the next ten years and stick it up on the inside face of your cupboard door or anywhere else you desire. It can be a digital list too, stored on your lap top or smart phone. Keep ticking of the goals you achieve them; it will give you a sense of satisfaction and also make you understand which goals are easy to achieve and which are a stretch.

You may have to rework the sheet and the goals as you go along, maybe once every year.

4. Make it effective

You can do all of the above and still not have an effective outcome from this goal setting exercise. There are a few tricks that can make this process even sharper. In an interview conducted by Columbia Business School, Professor Sheena Iyengar talks about not only the importance of writing down goals but also sharing them with a trusted friend or relative.

Iyengar did an experiment where she asked three groups of young individuals where they want to be in one year, in five years and in ten years. One group thought about it, the second thought and wrote it down and the third thought about it, wrote it down and shared it with a trusted other. She found that people who wrote it down achieved 50% more and those who shared it with a trusted other achieved 75% more. Again, the idea is not just achieving that goal you wrote down, rather it’s about bringing that focus you need to move towards things that matter most.

Think before you write down your goals and choose wisely, don’t just put random whims on a piece of paper but filter through to what is really important. Iyengar says that having more than 7-9 goals written down will just dilute the resolution or conviction to achieve them. Lastly, keep it flexible. As new information seeps in you will find yourself adjusting that financial or life goal which is five years away or even your recurring financial goal just six months away.

This is how it should be; rather than rigidly focusing on the words that are written, focus on the outcome those words seek to achieve.

Visualising your life goals and writing them down is a first step in coming closer to achieving these goals. Over time you may decide to discard a few of these goals or enhance others, whatever the choices you make, it is the focus and conscious decision making that will make your job that much easier in reaching where you strive to.