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Wish --> Goal --> Plan



My wife was recently accepted into the 2020 Chicago Marathon through their lottery program. It got me thinking about how running parallels financial planning in that she's turning a wish into a goal and then into a plan.


Wish - "I want to run a marathon again."

This is the wish phase - the idea of wanting to run a marathon. It's a fun to think about but it's just that, a daydream. Running a marathon is a rather large undertaking when viewed through a nebulous lens.


Using a financial parallel, a wish could look like: "It would be nice to help pay for my child's college education." It's a great idea but we can tighten that up a bit.


Goal - "I'm going to run the Chicago Marathon on October 11, 2020."

The statement above is much more concrete and specific. Ideally, it's nice to have a "why" around this goal: physical and mental health benefits, sense of accomplishment, structured exercise, and "me" time. Another benefit of having a concrete goal is that it can be assessed for reasonableness. If you've never run and the race is 2 weeks away, it's almost certainly not going to work out well. However, if you have a year and you're in good health then maybe a "couch to marathon" is much more feasible.


Using our college planning analogy, a more concrete goal would look something like: "I want to pay for 75% of my child's State University tuition 16 years from now." Examples of some of the "whys" around this goal may include wanting to provide a good start for your child without burdening them with student loans but not paying for all of it so they have some sense of responsibility. Your why is going to be unique to you. Now that you have a more fleshed out goal, it's much easier to make calculations, assumptions, and decisions around it. We can estimate the cost of State University's tuition will be 16 years from now and take a look at what you already have set aside. This brings us into our next phase...


Crafting a Plan- "In the 18 weeks leading up to the race, using Coach's Novice 1 schedule, I will run 4 days per week, including a long run on the weekends, two cross days, and one full rest day."

The goal is then broken down into more manageable chunks. My wife and I have used a specific running schedule for our past marathons with success (and a couple unsuccessful attempts as well!) and the first few weeks are just easing into the program; for example, the weekly runs are 3 miles and the first long run is 6 miles - not easy but certainly manageable with a decent base of prior running and fitness. Yes, later in the program there are some high mileage weeks but that's not the start - you build up to it. The work is done day by day and week by week.


Back to finances, thinking about funding college education can be daunting but with a specific goal in mind (dollar amount, time horizon, assumptions), a plan can be built to put you in the best position to be successful. "Contribute $300 per month into the state's 529 plan invested in this specific portfolio" is easier to wrap your arms around versus "college costs $10s or $100s of thousands of dollars!" With this knowledge, decisions can be made regarding trade-offs - does it fit into the budget? If not, what changes might need to be made? Do other goals take priority? What happens if we delay saving by 5 years? What happens if we cut back to $200 per month? It puts you back in control to make decisions applicable to your life and put them into context.


Adjust Accordingly

Life happens. Training for a running race doesn't always happen in a straight line. Perhaps you fall ill, have a big project come up at work that requires your time and energy, or the weather doesn't cooperate in a given week. You do the best to stick to the plan but you may have to adjust. You may only get out to run 3 times this week rather than 4 or need to cut a run short. It happens. Sticking to the big picture plan will help keep you moving forward. It can also help keep you accountable. Perhaps an injury sets you back and therefore you won't be able to safely complete the training and running the intended full marathon isn't feasible. Now what? Maybe you select a different race later in the year or maybe you reduce the race distance from the full to the half marathon. You can use the plan as map to see where you are and if you're on track, giving you the power to make decisions accordingly.


Life doesn't move in a straight line financially, either. Markets don't always behave the way we wish they would. The cost of education may increase more or less than we had originally predicted. Your child may get a full ride scholarship! College may look completely different in the future. The plan needs to be periodically reviewed and adjustments made accordingly such as saving more, finding other funding options such as student loans, or deciding how best to put the balance toward another goal given the scholarship.


Want help identifying your goals and crafting a plan? Want to check on your plan's progress? Let's chat!


Disclaimer

The above is for general information only. Consult with competent investment, tax, or legal counsel to best understand your unique circumstances before implementing any strategy. There is no assurance that working with a financial professional will improve investment results. Also, please don't take this post as exercise or health advice. Read our firm's disclaimer here: https://www.windingtrailfinancial.com/disclaimer.