Most people set their money goals at the very beginning of the year. I used to do this as well and, just like most people, I didn’t get very far achieving these goals. Why, you may ask?

No, I’m not weak and I certainly do not give up on my intentions easily once I have committed. Neither are the people who make hearty New Year’s resolutions, dress these as goals and promptly fail to achieve them.

There are many problems with setting goals early in the year, but weakness of character is not one of them.

More likely, the problem is that in a flurry of New Year’s enthusiasm and alcohol fumes, we tend to think of desires as goals. Hence, we set ourselves too many, too ambitious and not very realistic goals.

This year, I decided to bypass the enthusiasm and legal high of alcohol, and base our money goals (yes, I’ve discussed these with John) on careful analysis of our money situation.

Now I find myself telling you about our money goals in February after I’ve bored you to an inch of losing the will to live with posts analysing our earnings, spending and cash flow in 2018, our investments growth over the last year and the intricacies of our net worth.

Furthermore, I tell you that we have only one money goal for this year.

Our money goal for this year is to:

Increase our monthly cash flow by £1,700.

Now let me remind you about cash flow

Cash flow is the money you keep.

Because if you are building your financial prosperity hopes on how much you earn, you are making a mistake. If you are building your hopes only on how much you spend, you are making a different kind of mistake.

How much earn and how much you spend is important.

Still, the most important thing in personal finance is how much of your money you keep – save and invest – after you have nourished your life.

I’d also remind you not to be phased by my numbers – if you need a reminder of how un-important absolute numbers are remember anchoring (this is where research shows that if you think of a large number, like the year of your birth, before you go our to buy wine, you end up being prepared to pay much more for it).

Increasing monthly cash flow by £1,700 for us is ambitious but achievable. Anyhow, it is not in realm of fiction.

How we’d be looking to achieve this money goal

At a general level, there are always two sides to the cash flow equation: earning and spending. There is a trick to increasing cash flow consistently:

Increase your earnings faster (and at higher rate) than your spending.

What I’m thinking is that we must develop income streams that make £1,000 per month consistently. Or increase the revenue that existing income streams bring every month; most notably grow our on-line business and the dividends from the MOT garage.

(I expect that I’ll need to get creative here and will be keeping you updated on my thoughts and actions. If you would be doing this with me, please remember that selling your old stuff doesn’t count – we are talking consistent, recurrent income; preferably as passive as possible.)

The rest, approximately £700 will be made by reducing spending. Given how much we spent last year on buying a car (won’t do it again), work on the house (won’t do it again) and holidays, this should not be so difficult.

Why only one money goal?

Keep it simple, I say. And a live what I preach.

Increasing cash flow, goes hand in hand with saving and investing. This is how you reach your money goals without fail.


What are your money goals for 2019? How did you work these out?