Young and Restless for Success

Do you ever feel as if your life is going well ... until you spend time around friends and family your age who seem to be doing much better?

It's easy to fall into the jealousy trap, especially around the holidays as you spend more time around loved ones -- looking at their vacation photos, having dinner in their brand-new homes, listening to tales of their glamorous jobs and unwrapping their generous gifts that make your humble offerings look painfully meager, no matter how much thought you put into them.

When you're in your twenties and thirties, gauging success -- whether yours or others' -- is a tricky task. "At this age, you still have people who are across the board in terms of their lifestyle," says Joshua Klapow, a clinical psychologist in Birmingham, Ala. Some may still be in school while others have worked for years. Some are single, some are married and some are divorced. Some have kids and others don't. Your situation also can vary depending on where in the country you live. "If you look to others to gauge your personal sense of success, you're not going to get an accurate reading," says Klapow. There are simply too many variables.

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The solution: Tune out others and focus on yourself. Comparison isn't necessarily a bad thing. After all, it forces self evaluation and gives you something to which you can aspire. But throwing yourself a pity party won't get you anywhere. Setting goals and coming up with a plan to reach those goals will.

A five-year plan

As year-end approaches, this is a good time to take stock of your life. Turn a blind eye to those around you, and set goals to get on track to where you want to go.

1. Take stock. Start by asking yourself, "Where do I want to be in five years?" and then write down your answers. Try to be as specific as possible. For example, "financial independence" sounds good, but what does it mean? Instead, write, "Pay off all credit cards within two years." You can zero in on fun goals, too, such as a vacation or new furniture. Check out our list of Eight Things to Do Before Turning 30 for ideas of worthy goals.

2. Prioritize. To help you sort your goals, classify them into four categories, and rank them in order of short-term needs, long-term needs, short-term wants and long-term wants. (Learn more about prioritizing.)

3. Make a plan. "You can't wish yourself to success," says Klapow. In other words, get off your duff and do something about your situation. That usually means making a budget. Take a good look at your spending and look for areas that you can cut back and divvy up the money according to your prioritized list. Use our Budget Worksheet for help.

This doesn't mean you focus all your energy on one goal at a time. Say, for example, that you've found an extra $200 a month in your budget. You may be able to put a big chunk of it toward your credit cards (a short-term need), another portion toward saving for a house (a long-term need) and another bit toward a trip to Cancun (a short-term want).

I'm a big fan of setting up individual savings accounts for each goal. That way you can easily see your progress, and you'll be less inclined to raid your account on an impulse. For your short-term savings goals, consider a high-yield online savings account such as HSBCDirect, ING Direct or Emigrant Direct. All three allow you to set up automatic deposits so you don't even have to remember to save. For long-term savings goals, see our recommended mutual fund portfolios and learn more about investing your way to success.

4. Stay focused. It can be hard to stay content with your situation when it seems everyone else is passing you. It doesn't hurt to look back at your plan to ensure it's working and make adjustments as you go along. But don't let peer pressure derail your big picture. Blowing your money on a sexy new car before your finances are in order could have a domino effect on the rest of your goals.

A good way to stay focused is to have a physical reminder of what you want, says Klapow. For example, hang a picture of your dream vacation destination on your wall or make a countdown chain to tear off a link for each month you have left of school. As I've been saving for a house, I made a chart to monitor my progress. Every time I make a deposit into my account, I move my marker up further. It's a small act and may seem a little cheesy, but I actually get excited about it every month. I can see how far I've come and how much further I have to go.

Another way to keep your impulses under control is to share your goals with a spouse, close friend or family member. That person can help you keep your perspective and steer you back on track when you start to get restless.

Appearances can be deceiving

Even with goals in place, I'll admit I sometimes find myself looking at friends, co-workers and siblings and getting impatient for "my turn" to come. I turn 28 this week, and I drive a 10-year-old sedan, I rent a small two-bedroom apartment stocked with hand-me-down furniture, and it's been years since the last time I took a vacation that didn't involve a stopover on a family member's couch. Then I see others my age driving around in BMWs, building brand-spanking new homes and jetting off to exotic locales in the Caribbean and Europe.

But like many other individuals and couples in their twenties and thirties, schooling has forced me to make a few sacrifices. My husband is a medical resident. By the time he's finished with all his training, he'll be 35. In the meantime, most of our peers are holding steady jobs and making significant strides up their own career ladders -- and pay scales.

Although it seems that everyone is passing us by financially, we're not worried. In fact, look at our situation in another light, and suddenly it doesn't seem so bad. We don't owe a dime of debt other than my husband's student loans. We'll have enough money saved for a down payment on a house when we move next year to a more reasonable market. Plus, we have an emergency cash fund, a decent-sized retirement fund, the beginnings of a college fund and a little vacation fund for fun. We're not rich by any means, but we're on a path to get to where we want to be because we have set goals, regularly monitor our progress and help each other stay focused on the end result.

Just as my lifestyle doesn't paint the most accurate picture of my financial situation, your peers also may be fooling you, says Margo Geller, a personal business and money coach in Atlanta. Just because someone drives a Porsche, dresses well and seems to always have the latest gadgets doesn't mean they're rich or happy. They could be up to their eyes in debt. They may be miserable at their job, despite the cushy paycheck. They may spend all their time focusing on their career and money that they have no life.

"When you're in the position of feeling jealous, all you see is the good stuff -- as miserable as others may be," warns Klapow. So although it sounds clicheacute;, you really can't judge a book by its cover.