Article - Financial Goals
Financial Goals
Introduction Planning and achieving personal goals can be one of life’s greatest achievements. Goals are a personal commitment to behaviors and actions to reach a meaningful result. Although goals can be very rewarding, careful planning is needed to ensure that we stay on track and focus on those activities that will bring us closer to our goals. Having a laid out plan can mean the difference between attainable goals and far-off dreams. What are goals? A spending plan can be difficult to follow. Having a reward as part of the plan increases our chance of successfully staying on track. This is the importance of setting goals. Consider using SMART goals: Specific Measurable Attainable Realistic Time bound Specific: Think about what you really want out of your money. Would you like to repay debt, buy a new car, or save for a down payment for a home? After you decide what you want to save for, determine how much it will cost and the time frame of when you want it. Measurable: Break the amount down into small amounts that you can pay/deposit regularly. Attainable & Realistic: Keep it realistic. Too modest a goal and you may not have the desire to continue, too large a goal and you could get discouraged and give up. Time bound: Determine how long it will take to achieve your goal, and mark off progress to keep yourself motivated. Once you have determined your goals, break them down into short-term, medium-term, and long-term goals. A short-term goal will take 2 years or less to accomplish, a medium-term goal from 2-5 years, and a long-term goal will take 5 years or longer. An example of a long-term, SMART goal would look like the following: “I plan to reduce my debt by $5,000 in 5 years by making payments of $100.00 per month for 60 months. I will evaluate my current expenses to make sure I can afford this and use payroll deduction to make my payments.” What are the benefits of setting goals? Clarity – well planned goals provide clear steps to follow. Focus – specific steps can make it easier to keep you focused on your goals. Efficiency – having a roadmap to follow with specific tasks to accomplish eliminates the need for trial and error.
Dreams – dreams represent our ideal outcome. Well planned goals make can convert dreams to reality. Increased self-confidence – converting dreams to reality can provide a tremendous boost to selfconfidence. Results – according to research only 3% of the people in the U.S. have written goals. These people accomplish 80% more than those who don’t.
How do I determine MY goals? Brainstorm – Write down everything you would like to accomplish in your life that requires money Prioritize – Ask yourself: How will this goal benefit me? What happens if I don’t achieve this goal? Select – Choose 1-3 goals and create a plan. Don’t overwhelm yourself with too many goals at once. What will my goals cost? Make your goals as affordable as possible. Consider club memberships, purchasing directly from the manufacturer, taking advantage of clearance sales, comparison shopping and consider buying pre-owned versus new. How can I make it easier? While you have done a good job at reducing the cost of your goal the amount may be appear to be overwhelming. Consider breaking down the total amount. Consider the $5000 debt reduction example: Monthly contribution - $100.00 Weekly contribution - $25.00 Daily contribution - $3.58 You may find that taking your lunch to work instead of eating out will be the only change you need to make to reach your goal. What makes a budget so important? A well prepared budget accomplishes the following: Keeps you on track Serves as your personal commitment statement Allows you to monitor your progress Provides a way to audit your progress A way to uncover financial opportunities What increases your chances of success? There are several things you can do to help you along the way: Use direct deposit, payroll deduction and direct debit programs Make consistent money contributions toward your goal Ask yourself, “How important are my goals?” Continually re-evaluate your plan and make sure that you are doing everything you can to reach your goal
Introduction Planning and achieving personal goals can be one of life’s greatest achievements. Goals are a personal commitment to behaviors and actions to reach a meaningful result. Although goals can be very rewarding, careful planning is needed to ensure that we stay on track and focus on those activities that will bring us closer to our goals. Having a laid out plan can mean the difference between attainable goals and far-off dreams. What are goals? A spending plan can be difficult to follow. Having a reward as part of the plan increases our chance of successfully staying on track. This is the importance of setting goals. Consider using SMART goals: Specific Measurable Attainable Realistic Time bound Specific: Think about what you really want out of your money. Would you like to repay debt, buy a new car, or save for a down payment for a home? After you decide what you want to save for, determine how much it will cost and the time frame of when you want it. Measurable: Break the amount down into small amounts that you can pay/deposit regularly. Attainable & Realistic: Keep it realistic. Too modest a goal and you may not have the desire to continue, too large a goal and you could get discouraged and give up. Time bound: Determine how long it will take to achieve your goal, and mark off progress to keep yourself motivated. Once you have determined your goals, break them down into short-term, medium-term, and long-term goals. A short-term goal will take 2 years or less to accomplish, a medium-term goal from 2-5 years, and a long-term goal will take 5 years or longer. An example of a long-term, SMART goal would look like the following: “I plan to reduce my debt by $5,000 in 5 years by making payments of $100.00 per month for 60 months. I will evaluate my current expenses to make sure I can afford this and use payroll deduction to make my payments.” What are the benefits of setting goals? Clarity – well planned goals provide clear steps to follow. Focus – specific steps can make it easier to keep you focused on your goals. Efficiency – having a roadmap to follow with specific tasks to accomplish eliminates the need for trial and error.
Dreams – dreams represent our ideal outcome. Well planned goals make can convert dreams to reality. Increased self-confidence – converting dreams to reality can provide a tremendous boost to selfconfidence. Results – according to research only 3% of the people in the U.S. have written goals. These people accomplish 80% more than those who don’t.
How do I determine MY goals? Brainstorm – Write down everything you would like to accomplish in your life that requires money Prioritize – Ask yourself: How will this goal benefit me? What happens if I don’t achieve this goal? Select – Choose 1-3 goals and create a plan. Don’t overwhelm yourself with too many goals at once. What will my goals cost? Make your goals as affordable as possible. Consider club memberships, purchasing directly from the manufacturer, taking advantage of clearance sales, comparison shopping and consider buying pre-owned versus new. How can I make it easier? While you have done a good job at reducing the cost of your goal the amount may be appear to be overwhelming. Consider breaking down the total amount. Consider the $5000 debt reduction example: Monthly contribution - $100.00 Weekly contribution - $25.00 Daily contribution - $3.58 You may find that taking your lunch to work instead of eating out will be the only change you need to make to reach your goal. What makes a budget so important? A well prepared budget accomplishes the following: Keeps you on track Serves as your personal commitment statement Allows you to monitor your progress Provides a way to audit your progress A way to uncover financial opportunities What increases your chances of success? There are several things you can do to help you along the way: Use direct deposit, payroll deduction and direct debit programs Make consistent money contributions toward your goal Ask yourself, “How important are my goals?” Continually re-evaluate your plan and make sure that you are doing everything you can to reach your goal
