Setting Financial Goals
As you look to the future, what do you see? Do you have dreams that require financial stability? Most people do. With that said, getting what you want does not always come easily. In fact, you must work hard to achieve the results in life that you desire. Just like anything you dream about, getting out of debt and securing your financial future requires perseverance, consistency, dedication, and the ability to manage your money properly.
“People never plan to fail; they just fail to plan.”
Setting Realistic Goals
In order to achieve any financial success, you must create meaningful and realistic goals. Let’s consider the financial goals established for the following individuals:
Who do you think is going to achieve the financial goals established? More than that, who is going to be able to reach his/her dreams? You should have guessed that John’s goals are more likely to be achieved because they are written down and they are realistic and specific.
Write Down Your Goals
Sometimes when people write down their goals, they find that some are broad and some are more focused. Some will take more than five years, while others can be accomplished within six months.
There are three different types of goals to consider, each with a different timeframe to consider. Each type of goal is based on the date the task is needed, the total estimated costs needed to accomplish the goal, and the required savings needed to achieve results. Let’s take a look at the different types of goals you should consider.
- Short-Term Goals: Short-term goals generally take one year or less to achieve. Examples of short-term goals might be paying off a VISA card, buying a piece of furniture for your home, saving for a family vacation, or purchasing a new game system for your family.
- Intermediate-Term Goals: These goals generally take between one and five years to complete. Examples of intermediate-term goals would be paying off your student loans, getting an education or certificate, or purchasing (or replacing) a new car.
- Long-Term Goals: Long-term goals are those that won’t happen overnight, no matter how hard you work to achieve them. They may take a long time to accomplish; in fact, usually more than five years. Long-term goals usually require longer commitments and a larger amount of money than other types of goals. Examples of long-term goals may be saving for a child’s education or purchasing a new home.
Review Your Goals
You may need to change the timeframes on certain goals. Take the time each month to review your financial goals and see what you may need to adjust. In this way, you can make sure your goals are always realistic and not just “pie in the sky.”
The key, however, is to maintain the discipline needed to follow your plan. Sometimes you will have to wait to make a purchase, or you may have to make a choice based on two good items needed in your personal life. Whatever the case may be, it is important to recognize that if you write down your goals, studies show you will accomplish 85 percent of what you set out to do.
Start today and take the time to go over the worksheets we have provided. Play with it a little to make sure you are setting appropriate and achievable goals for your financial future.