Create a Financial Mission Statement to Stay Focused

Lately, I have been thinking about ways to help my fiancee and I focus on our financial future. We are still young (in our mid 20’s) and have plenty of time on our side, but we seem to be lacking that urge to focus intensely on the task.  The other week, I thought it would be beneficial if we created a financial mission statement. Every organization has a mission statement so why can’t a household have a financial mission statement?

What Is a Financial Mission Statement?

A financial mission statement outlines your households mission, purpose and reason for being financially secure. A good financial mission statement will accurately explain what your household wants to achieve financially in the future and how you are going to get there. It will also incorporate your values. In other words, if you want to thrive financially without sacrificing your charity donations, you should include that in your mission statement.

Important Paperwork

What Should Be Included In a Financial Mission Statement?

1. What problems or opportunities  need to be addressed?

In this section, you should include the problem areas of your families finances and how you are looking to correct them. This is probably going to be the most important part of your statement. If your main problem is paying off debt, you want to include some motivational keywords to make you want to complete this task fast. Here is an example:

The financial mission on the Smith household is to remove the vicious hold that debt has on us. We will strive to not increase our debt and aggressively pay down our existing debt.

Have no debt? Good for you! You should also use this area to focus on financial opportunities that may be coming up in the future. Looking to fully fund your Roth IRA each year? Put that in this section! Here is an example:

The financial mission of the Jones household is to fully fund both of our Roth IRAs each year. We will also strive to place an additional $3000 into our 401(k)s after these are funded.

That statement got to the point quickly and stressed the areas that the household would like to focus on. You may even want to put additional motivational words in the statement to get you pumped up to save.

2. What are you going to do to address the needs of your finances?

Here, you will state the path you are going to take to meet the goals that you addressed in the previous section. If you said that you wanted to pay off your debt, explain how you plan on doing it. Here is an example:

We want to aggressively pay down our debt by taking on additional part-time work and put into place several frugal habits. We realize that many of our previous spending habits were hurting us and it is time to change those habits.

That statement focused on how you are planning on paying down the debt. It gives you things to focus on to ensure that you complete them.

3. What are the values of your household and how will they help you achieve your goals?

In this section, you should interject your values into your financial mission statement. Do you hate debt? Do you want to give 10% of your income to charities? Do you feel that all parents should pay for their kids college education? This is the section to include those things in. Here is an example:

While completing our drastic debt reduction, we will continue to support our local charities. Also, in our quest to retire at age 55, we still want to enjoy certain things in life such as traveling. 

Combine to Get the Finished Product

Now that you have finished each section, you should combine your thoughts and goals into a complete financial missions statement. Keep in mind that the statement should be motivational. You want everyone who reads it in your household to want to remain focused on the financial tasks at hand. Here is an example of a finished financial mission statement:

The financial mission of the Jones family is to remove the vicious hold that debt has on us. We will strive to not increase our debt and aggressively pay down our existing debt without sacrificing our gifts to local charities. After we erase this debt, we will focus intensely on increasing our savings so that we may retire at age 55. We want to do this without becoming cheapskates. We also want to teach our children the ins and outs of money at an early age as we do not want them to have the same financial problems as us.

That mission statement gets to the point and conveys what the Jones household wants to achieve. It may not include all of the small things that will most certainly come around but it at least keeps them focused on the financial task at hand. This statement should then be placed in a prominent location in the house. I recommend placing it on the refrigerator in a bright color for all to see.

It’s time to get working on yours. Sit down with your family and discuss finances. There is no better time than today to get aggressive with your finances!

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My name is Adam and I am in debt. Yep, I came out and said it in the first sentence. I hope that shows you how passionate I am about getting out of debt and enjoying life in the process. Join my wife and me on our journey and be sure to contribute to the great discussions. You can get FREE email updates about the site as soon as they are posted. If you would like to hear our whole story, visit my about page. Thanks for visiting!

10 Responses to Create a Financial Mission Statement to Stay Focused
  1. Craig
    May 28, 2009 | 12:40 PM

    I like this strategy, it’s a good way to write down exactly what your plan is and how to keep it. A great starting place for those who want to begin getting their finances in order.

  2. Matt Jabs
    June 1, 2009 | 10:23 AM

    This is a very thorough implementation of a Financial Mission Statement and one that will be beneficial for all who employ it.

    I called mine a “Financial Philosophy” & went a shorter route by stating in a few words, “Sacrifice not to benefit later”.

    I then break my statement into more specific goals to follow, but they all focus on my mission of sacrificing.

    No matter what method you employ, creating a Financial Mission Statement is an exercise you will benefit greatly from.

    Matt Jabs’s last blog post..Reduce Monthly Bills – TV Edition

  3. meinmillions
    June 3, 2009 | 3:02 PM

    This is a great idea. I’m planning on creating a hybrid mission statement/investment statement in a future blog post.

    meinmillions’s last blog post..June Goals

  4. Mr Beagle
    June 5, 2009 | 1:42 AM

    I absolutely agree. Writing down our goals gives our financial planning greater effectiveness. We become pro-active in handling our finances instead of being reactive to circumstances around us.

    I’ve been saying that we should have goals before we even spend a single cent in investments. How will you know what you want to invest in, if you don’t even know what you want to achieve?

    Adding on to your points of addressing problems, concrete action steps, and personal values: good financial mission statements (or financial goals) need to be SMART:
    1. Specific
    2. Measurable
    3. Ambitious
    4. Result-oriented
    5. Time bound

    P/S: The text of your blog post isn’t showing up on my browser (Firefox 3.010). I’m not sure if others are having this problem. I had to view the HTML source to read the post 🙂

    Mr Beagle’s last blog post..Future Value Calculator

  5. Ace of Wealth
    January 30, 2010 | 12:44 AM

    This is a great idea. Understanding what you’re working so hard to save towards will only be a motivator. Saving without any specific goals or direction is a lot more difficult, and normally leads to failure.
    .-= Ace of Wealth´s lastest post ..Book Review: Automatic Millionaire =-.

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