Do you feel like you're putting in a lot of effort, but not getting making headway? Perhaps you feel like you're always working, but no matter what, you can’t seem to financially get ahead.
Here's the thing: if you don't establish financial objectives for yourself, you're going to feel like you're running on a hamster wheel and never really getting anywhere. It's time to set some financial goals.
What Do You Mean When You Say "Financial Goals"?
Any strategy you have for your money is a financial goal and this can be both short-term and long-term. For example, saving $1,000 is a short-term financial goal, but investing for retirement is a long-term financial goal. Your objectives should keep you focused and accountable, no matter how long it takes to achieve them.
Setting Financial Goals in 5 Easy Steps
1. List Your Goals
The first step is to write down a commitment you've made to yourself. When you write out your objectives, you're more likely to become focused on accomplishing them. Place this commitment everywhere - on your car, on your desk, or in your bathroom mirror. You can even take a screenshot and set it as your phone’s wallpaper so you can see it all the time! This will help keep your objective in sight so you can focus on accomplishing that goal. When you commit your goals in writing, they are a target instead of thoughts that are quickly forgotten.
2. Specify Your Objectives
Don't have a vague or nonspecific statement goal. While you may say, I’d like to manage my money better, try to come up with some specifics. For example, set the goal to save an extra $30 a week by not eating out as much. Identifying specific goals will have you achieve that huge blanket goal.
3. Make Them Quantifiable
So, you want to save money for retirement? Great! Your next step is to examine your current finances, as well as debt, so you can have a solid number to work with. How much time will it take you to save a certain amount of money or to pay off your debt? Putting these numbers into perspective is important and is one of the many ways a fiduciary-focused financial advisor can help you.
4. Set A Deadline For Yourself
It’s not enough to have goals, you need to set a timeline for yourself with a realistic, yet challenging, deadline. Ask yourself, “When do I want to achieve my objective?” If you want to pay off $15,000 in a year, you’ll need to put aside $1,250 a month. If this is a possibility, but a bit of a stretch, you’re in a good spot.
Some goals may require specific steps in order to achieve them. Try breaking your goals down into smaller pieces and keep a running list. You can use this list to create smaller deadlines and to keep yourself on track, so you can actually accomplish that big goal!
5. Avoid Comparing Your Financial Goals to Others
It's easy to get caught up in what other people are doing financially, but you’ll do yourself a huge favor by not thinking about it or comparing yourself to them. Instead, focus on your own goals and accomplishments. You’ll get to where you want to be faster by coming up with a plan that’s right for you. If you’re unsure of where to start, consider contacting a Financial Advisor that can personalize your financial goals.
The Importance of Setting Financial Goals
Having goals will transform your perspective on money. You'll begin to notice how each decision affects your overall financial well-being. If you don't have any financial ambitions, it’s easy to frivolously spend your money away. Consider how much that is costing you though. That extra $25 a week that you throw away, could be $1300 that pulls you out from under your credit card. You may even decide to invest the money, so it can further grow.
Michael R. Rose is dedicated to helping individuals rethink their financial goals by providing them with customized financial planning in Albuquerque. With the right financial planning, you can have the freedom to pursue your financial goals! Get support by calling him today!