Houston, we have a failure.

So once a year I like to open up my Excel spreadsheet and make some assumptions as to how the calendar year will play out for the Ninja household….financially speaking that is. I’ve done this years past, and every single year I seemed to unintentionally underestimate our ability to save. Often meeting our annual goals three to five months earlier than planned. While that is definitely a good problem to have, it’s still a problem. I want my goals to be challenging. Something that would take a full twelve months to reach. Heck, maybe I shouldn’t even be able to reach my goal at all.

Well folks, it looks like my wildest dreams are coming true. We are on course to epically fail at reaching our 2012 personal finance goals. According to our budget, our accounts are supposed to have the following balances by years end:

    • Checking Account: $1,000
    • Savings Account: $100,000
    • Roth IRA: $31,500
    • 401K: $37,500
    • Total Assets: $170,000

We started the year out with $114,622 in assets, meaning we had to move up $55,378 this year to achieve our $170k goal. For those that like things broken down, that would require an increase of $4,614 every month. A quick glance at the handy-dandy savings/net-worth meters on the side of my blog show that our current assets total up to about $135,000. Meaning we are 36% of the way to reaching our goals, but we are 58% of the way through the year.

Frick. 

While I’m extremely tempted to go in to my spreadsheet and make our 2012 goal be a $150,000 net worth, I know that would only cheat myself.

Think about it like this. Would you rather set a goal to run a mile in 6 minutes and run it in 5:45, or set a goal to run a mile in 5 minutes. but run it in 5:15? If you said 5:45, you are a) an idiot, b) lazy, or c) a lazy idiot.

I’m learning it’s not so much the goal that matters, but more so one’s desire to push themselves farther than they ever thought they could. That is what I want to do with our personal finances; Push ourselves to be responsible, to take risks, to have fun, and to be diligent. Ambitious goals promote these types of qualities. Easy goals promote a false sense of accomplishment.

14 thoughts on “Houston, we have a failure.

  1. I have to disagree with you somewhat – the meaning of the goal itself matters as well as the measures you take to get there. If running a mile in 5:15 gets you a blue ribbon but to shave that extra 30 seconds you have to cut off your arms or pay $1M for magic shoes it’s probably not worth it, eh?

    I’m not trying to say your savings goal is completely arbitrary and certainly coming to the end of the year with several thousand more in the bank would be great – but sometimes life is about the journey and not the destination, right? If you decimate your standard of living unreasonably to reach your goal, does it taste sweet or bitter when you get there?

    I certainly think you should keep setting goals, but ideally goals should push you slightly beyond what you would do without them, not change your life completely. Reaching that goal is not the ONLY objective to life or your finances.

    For example, in 2010 I set a goal to lose 50 lbs in one year. By the end of it, I “only” lost 40 lbs so I failed, right? But what would I have had to do to lose the last 10 lbs in my timeframe? Develop an eating disorder? My real goal-behind-the-goal was to promote health (as I’m sure yours is to provide a nice livelihood for your family, among others) so I met that goal by losing the 40 lbs but would have fallen short of that ultimate goal had I pushed myself to lose the last 10 lbs in an unreasonable manner.

  2. Ha. Well it is good to have some stretch in your goals. Our goal this year is a little bit on the easy side but we worked hard last year. I’ll admit, I am a little lazy. I kind of like being lazy but reading about big goals can be inspiring.

  3. Goals are not always met, and if not so what? Honestly, I can’t see this as much of a problem. What would happen if the market crashed 25%, and/or you suddenly incurred a major unanticipated expense? Would you flagellate yourself because you fell behind in reaching your “goal”? Or what if the market soared later this year (the Presidential elections could have a beneficial effect on the market, even if God forbid the ex-CEO of Bane Capital is chosen)? You might come closer to your “goal” with no action of your own.

    Just keep doing what you’re doing, and let the chips fall where they may.

    • “Just keep doing what you’re doing, and let the chips fall where they may”

      Great advice! I’ve incurred major expenses these past 5 years due to severe health issues (disabled- no longer working + medical expenses), and I’ve been beating myself up over my and my husband’s finances. But it’s not my fault and we just need to keep doing what we’re doing (i.e. be extremely frugal) and hopefully things will work out!

  4. I have similar goals but don’t get too hung up on them because of the all the variables Larry stated. They are just kind of out there and if I hit them I know things are going pretty good and if not then it’s time to take a closer look at the situation.

    Where do you have your soon to be $100,000 savings? That is some pretty serious cash.

  5. It’s good to have such goals, I’m lacking in that department. However, as Larry has said and I have noticed that two components of your net worth are susceptable to outside forces, Roth and 401k. To me, those should be kept out otherwise you will turn into me and just play it conservatively which I’m sure you do not want to do. Unless you turn those into day trading accounts, those should just be set on autopilot with a tweaking once or twice a year. At least that’s what “they” tell you to do 🙂

  6. I think it all depends on the type of person you are. Some people will set a goal and no matter what will be disappointed by the outcome. If they fail they’ll beat themselves up about it but if they succeed they’ll think they didn’t make the goal hard enough. Other people set reasonable goals and far surpass them because they are driven by the challenge of beating their own expectations. Other people need to set their goals low because success drives them and failure will destroy them. You need to know yourself, your reactions, and what drives you to continue to succeed while setting goals for yourself

  7. Holding yourself accountable is a tough. Using a spreadsheet makes it much easier to to view and decide what changes need to be done to achieve the goal. Good luck.

  8. How are you doing on reaching the combined Savings + Checking goals? Because THOSE you have complete control over. Your IRA(s) and 401k(s) are subject to the whims of the market any you can diligently contribute and still not reach your goal if the overall market has fallen.

    You also converted ~$10k from your savings account balance into equity in an SUV. Sure you have greatly reduced the liquidity of that money (but no less liquid than any retirement account which you include in your calculations, IMHO), but you still have an asset that has value which you chose to not include.

  9. Hey, on a different topic, I got a funny Manteresting story for you. At my office, we were talking about Pinterest and someone brought up how there are other sites just like it, and a male co-worker actually mentioned that there was a male version. He was talking about Manteresting. Crazy huh?

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