Should I have stretch goals?

Happy Monday everyone!

I’m slowly settling back into home after a long month of travel. In fact, right now I’m in bed with my feet tucked under my housemate’s dog…which is a good thing since last I looked it was around 7 degrees (farenheit) outside. Brrrrrrrr. Yesterday I made bread and went to church, and today’s agenda includes such exciting action points as “do laundry” and “write blog post.” It does not include anything like “buy plane tickets.”

So what I’m saying here is the cozy factor is through the roof around here. Naturally, this state of affairs led to an hour Saturday evening which caused me to tweet this:

So what was the deal?

Well, first of all, January’s been on the expensive side. I bought (cheap, but still) fitness classes, I’ve had some other personal/medical expenses, I made a donation to a local charity, and a few other things happened. None of it out of control, but I’ve needed my freelance income to help me cash flow these expenses. Which means I haven’t been putting anything extra into my house fund.

Also, uh, oops, I did it again. Where “it” is “take saved money and use it to buy stocks when the price is cratering.” You may recall this particular weakness from last summer when I stuck 4/5 of my brand new e-fund into the market, the last time the Dow got down into the 15,000s. This time, I took $1000 from my house fund and put that in the IRA as well (the 2015 IRA where I still had tons of contribution room.)

I don’t regret this, because I was really bummed that I basically didn’t contribute to my Roth IRA at all last year and I’m glad I contributed something before the April 15 deadline.

But it did make me think about my penchant for semi-extreme goal setting and its consequences. It turns out that I really don’t like “boring” in my finances. So last year, I had way more fun saving 50% of my income (well, 51%) than I did saving $500/month into my e-fund. As a result, I tend to set up pretty extreme goals, because they’re more exciting to go after. But I have enough sense to call them “stretch” goals — since they are hard to get to.

I don’t know, however, if this is really good for me. When I took the $1000 out of the house fund to buy stock, I think it was a fine financial decision for the future, and shouldn’t impact my actual house-buying that much. But I got kind of tense over it anyway, and ended up on Saturday night staring at my budget trying to figure out how I could make up the money in the house fund. I’m pretty good at frugality, but not really $1000-in-a-month-on-top-of-other-savings, you know?

So: working hard for stretch goals is good. But stressing out about them and wasting time on a night when I could have been doing something else is not good. This time, I caught myself and refocused: I read a good book and enjoyed my evening. But I don’t want it to be a pattern that I stress about meeting stretch goals. They’re stretch! I shouldn’t feel obligated to meet them!

Do y’all do this? Got any suggestions about dealing with the competing desires to set ambitious goals and to not spend too much time worrying about them?

24 thoughts on “Should I have stretch goals?

  1. Hmmm. Two thoughts
    1) I like stretch goals. Part of me slacks off when I know I can reach a certain goal easily. Always having a higher bar typically means I’ll err on the side of knocking it out of the park, instead of barely making my original goal.
    2) Do you have too many buckets for your money? Hubs and I are currently evaluating our situation. We both like to stash away money in random accounts or places, but sometimes it feels a bit like we are robbing Peter to pay… Peter? House funds and emergency funds are all fine and dandy, but if you can’t keep your mitts maybe it’s better to have consolidated accounts.

    1. thesingledollar says:

      That’s an interesting question on the buckets. I think — and I stress “think” since I’m trying to figure myself out here — that I may have the opposite problem: not enough buckets. That is, I’m pretty good at keeping my hands off money in savings accounts EXCEPT for the virtuous purpose of buying IRA shares on the cheap. I can’t seem to help myself there 🙂 So the solution might be to have a savings account earmarked for “stock sales” and try to keep some cash in there. But I know that if I take money out of the EF and house fund and so on and put it all in one big savings bucket, I’ll find a way to spend it on something much less virtuous.

  2. I like the idea of stretch goals and we definitely have them, but try to stay flexible and reasonable about meeting them. This includes paying off our house early. We’ve made more progress than if we’d never set this goal, but it has also had to give way to other expenses like childbirth medical bills, etc. Keep stretching!

    1. thesingledollar says:

      Yeah, it’s all about the ability to stay flexible (this also applies to your comment about exercise, hee.) I’m not sure I’m that great at flexibility, but I think I should probably try to get better (at both kinds.)

  3. ARBM says:

    I think the extreme goals or stretch goals are good. Especially if they keep you motivated and energized at working towards them. That being said… You don’t want to stress about them too much. It’s a balance, I suppose. I’m not really familiar with the american retirement accounts, but can the money that you invested in your Roth IRA be taken out in case of emergency? If so, can you label that $1000 as “emergency fund” located in your Roth IRA? Then it’s not so much a big deal of where the money is, but that it still exists… Does that even make sense?

    1. thesingledollar says:

      Yes, it makes perfect sense. And yes, you can withdraw from the Roth in an emergency (only as much as you put in — you can’t withdraw growth without a penalty until you’re retirement age.) This is why I’m OK with the moves I’ve made recently. But I’d still like to work on not being stressed out my stretch goals 🙂

  4. We have previously set goals that were a *slight* stretch, but this year decided to set legit stretch goals, knowing it’s unrealistic to reach them. So I can tell you in a year how that goes. 🙂 I think if you know what your realistic goals and stretch goals are, then it’s great to have a bigger possible target in mind, so long as you aren’t setting yourself up to *feel* like you failed. You ultimately want to be able to recognize how well you’re doing, not feel bad about it, so that’s the downside to the stretch goals. But the upside is they could motivate you to level up your savings. Helpful at all? Probably not. 🙂

    1. thesingledollar says:

      Hee, it’ snot that it’s not helpful — it’s just that’s the exact same conversation that’s been playing out in my head without resolution for a while now…. I think I really might feel like I failed when I don’t meet the stretch goal. It’s not logical, but there it is. On the other hand, I’m afraid if I don’t make them, then I’ll just meet my ordinary goal and spend the rest on shoes. 🙂

      1. If you’re for real afraid of spending the rest on shoes, then go for the stretch goals. Know thyself. 🙂

  5. Hannah says:

    Although I know that good goals are meant to be time bound, I tend to adopt the attitude of, “Accomplish what I want, and then do it again.”

    I think that I’m restless, so my goals are just out of reach until I achieve them. Once I achieve them, then it’s on to the next thing. So I never have stretch goals, just ideas that need to be accomplished until I accomplish them.

    My understanding is that most people do not operate like this because such a mindset leads to rule-breaking and decisions being made (by me) with about 30-50% of the information that could be gathered.

    1. thesingledollar says:

      Oh wow, we have a lot in common psychologically 🙂

  6. Jordann says:

    Ooph. I do this. I set stretch goals and then obsess over them. Right now I’m doing that a little bit for my $35,000 house fund goal. I need to save a whack of money to achieve this goal before the end of 2016, so I’ve been spending a little too much time agonizing over my spreadsheets.

    Whenever I catch myself doing this, I always give myself two options:
    a) Stop what I’m doing and start doing something that will propel me towards my goal (ex: writing that freelance post that is due soon, work on my website, pitch a new client). Working towards my goal immediately eases my stress over it.
    b) Close my computer and resolve to do something that will de-stress me, like read a book or watch a movie with my husband.

    Worrying about your stretch goals won’t get you any closer to achieving them. 🙂

    1. thesingledollar says:

      You are totally wise beyond your years 🙂 I love your two options — next trick is to catch myself before I even start with the obsession!

  7. ha I don’t have any advice because I’m working on that myself. I always feel compelled to do more, even if I don’t have to anymore. It’s like I’m afraid if I stop I’ll slip back into lazy mode or something.

    1. thesingledollar says:

      Oh man, if you find out the secret let me know!

  8. I like the idea of stretch goals. I feel like it could give one an additional sense of “control” — I mean, any elective budget is under the control of the person who made it, but the stretch goal concept seems to add in some extra flexibility. Or something. Because once you’ve set a stretch goal and labeled it as “stretch”, you could then choose to work really hard to meet the stretch goal, or you could decide that other things are more important, and push the stretch goal to be next year’s primary goal — either of which would be okay since it’s a stretch goal.
    I am new to the concept of goals when it comes to finances, so I have yet to figure this out for myself. 🙂

    1. thesingledollar says:

      Yeah, I think stretch goals are one of those things where it really depends on your personality. Some people find them very motivating, just like some people find really hard exercise classes motivating 🙂 I’m beginning to think that they might just guilt me out, though. Like, once I set the goal, even if I call it “stretch,” it’s difficult for me to let it go without feeling like I’ve failed.

  9. amanda says:

    I’m struggling with this kind of thing right now. After paying off the last of my grad school loans, I made a big change which is for the first time ever ramping up my 401k contributions so that I’m on track to hit the max for 2016. The 401k funds are already gone before my paycheck even gets to my bank. I am struggling with this! I’m not sure if the methodical x amount goes to x place each month kind of thing works for me! While I get why having everything happen automatically is convenient, I’m not sure that it feels satisfying to me in the same way that throwing as much money as possible at my student loans each month did.

    1. thesingledollar says:

      Man, NOTHING is as satisfying as paying off huge chunks of debt. I think we all have to learn a different kind of pleasure 🙂 Think how good it will feel to look at the end of the year and see a really big retirement fund.

  10. I kind of think it’s OK if you go crazy on the house-saving as opposed to long-term investment savings. Some of us function better with one-at-a-time areas of focus, and if you are inspired by saving for a house and not so inspired contributing to investments, go for it. Set a strong, steady, fixed amount for the investments, and go nuts on the house saving. (Am I completely off the mark? Does this even address your question? Sorry if it doesn’t.)

    1. thesingledollar says:

      It totally does address my question! I don’t know what to do, still, but it’s good to have input while I think it through 🙂

      1. Hannah at Unplanned Finance recently wrote a post about “savings snowball”. I found it helpful in sorting out my own multi-savings uncertainties.

  11. Ellie says:

    Oh goodness i can relate so much to your tweet – why do we do these things to ourselves? Its hard to get the balance between saving and earning and trying to use other methods to accumulate money at times isn’t it? I’ve recently done a few things i wish i hadn’t all in the name of trying to plan for the future!

    1. thesingledollar says:

      It is hard, and if you’re a little bit of a worrier especially! I hope you get your own balance right….

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