What are financial goals?
Any plan you have for your money is a financial goal. You can have both short- and long-term objectives. For instance, saving ₵1,000 is a short-term financial objective, but investing for retirement is a long-term financial objective. Your Financial goals should give you focus and keep you accountable, no matter how long they take to make them happen.
5 Steps to Setting Financial Goals
When you put pen to paper and write out your objectives, something special happens. You’re also more likely to accomplish goals.
Therefore, go ahead and commit to yourself in writing. Then, attach them to your car, desk, or bathroom mirror. Type them into your phone’s Notes app, take a screenshot, then set it as your wallpaper to ensure you see them constantly! Keeping your goals visible can help you stay focused.
Don’t just state, “I want to improve my money management skills.” That is far too broad. Narrow it! For example, What if you want to focus exclusively on your debt? That is one place where money should be concentrated. You’re going to break this down even more in the next two phases!
To begin, let us assume that you wish to eliminate debt. Now is the moment to choose a monetary value, something that can be quantified to determine if you achieved the goal or not. You examine your budget and debt and decide to make a $15,000 payment against your debt. That is a measurable objective!
Will you ever truly accomplish your objectives if they are not time-sensitive? “There are seven days in a week,” author Benny Lewis explains. “‘Someday’ is not one of them.” Put an end to the phrase someday. You must establish a deadline for yourself and make it reasonable—but also tough!
Consider our case once again. When do you intend to achieve your objective? If you want to pay off ₵15,000 in a year, you must pay ₵1,250 every month. Is this a possibility but also a stretch? Good! Breaking your objectives down into bite-sized chunks will keep you motivated as you check each little goal off your list, which will then keep you motivated to complete the large goal
It’s natural to glance around at what others are doing and feel as though you should be doing the same thing. However, when we begin comparing ourselves to others, we are engaging in a game that we will never win.
When establishing financial objectives, ensure that they are the greatest fit for you. In other words, just because everyone else is taking out second mortgages to refurbish their kitchens does not imply you should. Put on your blinders, concentrate on your lane, and race to the finish line.