Setting a BHAG

[Editor’s Note: This is an independent post written by JJ. This post may contain affiliate links. Please read our disclosure for more info.]

BHAG stands for Big Hairy Audacious Goal.  According to Wikipedia, a Big Hairy Audacious Goal can be described as a strategic business statement similar to a vision statement which is created to focus an organization on a single medium- to long-term organization-wide goal which is audacious, likely to be externally questionable, but not internally regarded as impossible.

While the Wikipedia definition is targeted towards an organization, I like to think a BHAG can be used when setting personal goals as well.  My wife and I sat down this past Saturday to review and finalize our 2019 goals and to set our 10-year BHAG. We actually have two 10-year Big Hairy Audacious Goals.  Both of which are extremely questionable, but not impossible. We will need to work hard and work together if we want to reach either of our BHAGs.

For transparency purposes, my wife and I are very goal-oriented people.  We enjoy setting goals and tracking progress, but we also understand that life can change in an instant.  We all are in different seasons of life.  These goals are based on our current season, but life can change quickly so we will adjust our goals as needed if and when our life season changes.

Anyways, let’s start with our 2019 goals:

2019 Goal #1: Payoff car by October 19, 2019

In February, I published a post called Financial Independence on a Teacher’s Salary in which I discussed our goal that we created in our late 20’s of having all of our debt paid off (except mortgage) by the time my wife turns 35.  In order to complete that goal, we need to payoff our last loan by October 19, 2019.

We were on track to completing this goal until our flooding disaster last fall which my wife wrote an article called Hello Mauston. Not only did we lose our entire finished basement, we also lost both of our cars to the flood.

2019 Goal #2: Save $35,000

This is a pretty lofty goal.  Since moving to our new city and getting a new job, my income was decreased by $25,000.  That’s right, I took a pay-cut of over $25,000 when we moved and I couldn’t be happier with life right now.  With my lower income, we still set a rather lofty goal of saving $35,000 in 2019. To be clear, that’s $35,000 in contributions not market value.  

We actually set this goal at our last monthly household expenditure review meetings and made changes to our budget to try and reach this goal. $19,000 will go directly into my 403b, which will lower my take home pay.  That leaves $16,000 to save to reach our goal. By our calculations, if we are able to only live on my wife’s income, we will reach our $35,000 savings goal. That’s if we don’t overspend all year long and we don’t have anymore disasters.

2019 Goal #3: Maintain Healthy Lifestyle

I love bread more than anything in this world, but bread does really bad things to me when I step on a scale.  Last summer, I realized that things needed to change so I did what many people are doing right now and jumped into the keto diet. It was so hard! For 2 months, I was able to stay strict on keto and dropped 25 pounds.  It was a great feeling.

I’m now working hard every day to keep the weight off. I’m not fully keto right now, but working towards a healthier lifestyle with a bit more balance than keto allows.

Components of a BHAG

We learned earlier that a BHAG is a Big Hairy Audacious Goal.  I’m a fan of creating SMART BHAGs. SMART stands for Specific, Measurable, Attainable, Realistic and Timely. Here are the components for SMART BHAG setting:

  1. Specific: The goal should be clear and specific
  2. Measurable: We need to be able to track our progress. We are goal-oriented people and we need to be able to see progress.  We have charts posted in our house which allows us to track our progress.
  3. Attainable and Realistic: The goal needs to be challenging enough to motivate us, but not so challenging that it’s impossible to achieve.
  4. Timely: The goal needs a completion date.  Our BHAGs are set for 10 years.

BHAG #1: Payoff Mortgage

We bought our house about 1 year ago.  We financed our house for 30 years since we were moving to a new city and I didn’t have a job secured at the time.  We bought the house based solely on my wife’s income. She’s the breadwinner and I just live in her house.

We recently listened to a great podcast episode on ChooseFI where the guest talked about paying their house off in 5 years.  After that episode, my wife and I looked at each other and knew that was our first BHAG. Our goal is to payoff our house by December 31, 2029.  In order for that to happen, we need to pay an extra $775 on our mortgage every month.

Here’s the great news!  This BHAG ties into our 2019 Goal #1.  Once we payoff our car by October 19, 2019, we will be able to use the money that we’re paying towards that loan, $667, and move it to pay towards our house.  We will only need to find an extra $100 every month to make our first BHAG a reality!

BHAG #2: Save $450,000

Just like our first BHAG, this BHAG also ties into a 2019 goal.  If we’re able to consistently achieve our 2019 Goal #2, we should be really close to completing this BHAG.  It’s still not easily attainable though because there’s some room that needs to be made up based on our 2019 goal.  

If we’re able to reach these two BHAGs, it opens up so much flexibility for us. Luckily, we both love our jobs, but who knows how we’ll feel in 10 years.  If we want to pursue something different for even less pay or no pay, we can because completing these two BHAGs will allow us to not have to work for a w2 income anymore.

My Challenge To You

Set at least one financial-related goal for 2019.  Track your progress and report back at the end of the year.  I will definitely be publishing an article on our 2019 goals to see if we were successful or not.  My second challenge to you is to set at least one BHAG.

So that’s it, let us know in the comments below what your 2019 goal(s) and BHAG(s) are.  I’m excited you’re with us on this journey to financial freedom. Keep up the great work!

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  4 comments for “Setting a BHAG

  1. Jack@TeachFI
    March 25, 2019 at 3:25 pm

    Great post, JJ! Victoria and I set a goal to achieve a minimum of a 40% savings rate for 2019 and maximize all of the retirement vehicles available to us (401k, TSP, 401a, 401b, Roth IRAs). I’m excited to share our progress on our next post which will outline our spending/savings for the first quarter. I believe it’s important to not only share your goals, but to also share your progress as you work towards them – this keeps us accountable and gets us even more excited about our pursuit toward FI. I think we will be reevaluating our initial goal as a result of crunching the numbers for that post.

    I love that you two set a goal to pay your house off in 10 years. I understand the math behind “investing over paying off your mortgage early”, but I just can’t see why anyone would want to owe someone else money for 30 years. It’ll feel great to put that debt behind you!

    You two are doing awesome!

    • March 26, 2019 at 9:33 pm

      Thanks Jack! We’re all about not having debt. I know the math might say to not pay it off, but we feel so much better when we don’t owe anyone anything.

      I love the great work you and Victoria are doing. I’m excited to read more in your future posts!!

  2. March 26, 2019 at 6:50 am

    Great post 😁

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