Transitioning Between Financial Baby Steps
We completed Dave Ramsey's baby step #3 (a fully funded emergency fund) in January this year. That was months ago, and while it was an extremely important and difficult goal for us to attain, we have been struggling to take the next step ever since.
Of course the timing couldn't have been better, as we welcomed Rooney into our family just a month after completing our savings fund. We intentionally took a bit of a hiatus from moving onto the next baby step because we wanted to get settled into life as a family of three and see how she would affect our budget.
Looking back, I'm not sure this break was the best choice because now we have been wavering in our financial focus for months while we've had less than ideal willpower to make every dollar count.
It hasn't been all bad. We did take full advantage of the extra cash to complete much-needed and deserved projects. We bought a new patio table and chairs, a new laptop, minivan and completed a big landscaping project.
We also veered off of Dave's plan slightly and started investing 5% of our income for retirement before we had our full emergency fund. We did this to capitalize on our company's 401(k) match.
While all these things are great, I fear that we are stuck in a cycle of trying to accomplish too many smaller goals (or just spending the money on fun stuff) before moving to the next big goals (following Dave's baby steps): to save 15% of our income for retirement, start a college fund for our children and eventually pay off our house early.
Yes, they are all very big financial goals, but not unattainable. But we are trapped in the transition between baby steps. Because writing blog posts usually helps me solve problems, here is our action plan for the next time we are stuck...
Steps to Transition From One Goal to Another
- Celebrate briefly. It's important to take time to acknowledge the accomplishment that we have completed. Allow a celebration dinner or small gift as a reminder of the milestone we have reached.
- Dream about the future. Take some time to think about the future. Refer to Your Family Playbook for bigger goals that we have set and use those as a guide toward the next goal.
- Discover what matters most. Are there new passions in our lives that would lead us on a new path, or should we continue down the path we have been going?
- Establish a new goal. Write that sucker down! Get focused and attack the next goal fervently.