Tue, 12th May, 2009 - Posted by Nash

5 steps to set financial goals that you can achieve

financial goals that you can achieve

Goals determine what you’re going to be

Julius Erving

What is a financial goal?

It’s just something that you wanna get in the future and for you to have it, you have to do something about it today.

For example, you wanna get that red, flashing beaming car? Or you wanna go to a romantic holiday in Paris with your loved one? Or, the all-time popular reason – to save money for your children’s education or to set enough money for your retirement. Whatever you want that involves having some money for you to use in the future – that’s a financial goal.

Yup. Got it. Great!

So, what do you need to do now?

No.1. Define your financial goals

This is a no-brainer, but I still have to state it in. You can only know what exactlyyou need to do only if you sit down, think about it and put it down on a paper (or your computer, if you’re the techie type). Don’t need to write a research report about it. Just a simple what-you-want would do.

Try to make it clear and put some numbers with it – I want to have 5,000 dollars by end of this year coz I’m really dying to go to Paris – is much better than – I want some money coz I wanna go to a holiday at the end of the year. The clearer your goals are, the more motivated you’ll be at achieving it.

No. 2. Be realistic in defining your financial aim

Yup. This is quite important. If you set your financial objective is to be a millionaire in one-year’s time, but looking into your income now, it may take you 20 years to achieve it, then you’ll know that it’s unrealistic. Sure, you can hit a lottery, but that’s wishful thinking and not planning.

The bad thing about setting a target too high is that you’ll have that nagging feeling in you that tells you it’s impossible and pretty soon that feeling will demotivate you. And when you don’t get it – you’ll get I-told-you-so straight to the face. That’ll be the last time that you set up a financial goal.

Instead, try something that you feel that you have a chance to achieve. Try not to make it too easy, so that you’re out of your comfort zone and is doing more than usual.

3. How long will you take to complete your financial goal?

Some financial targets are short. For example, you wanna keep enough money so that you can buy a new shirt at the end of the month. Some are long – you wanna keep some money from now until you retire so that you can have enough money for your retirement.

Whatever your goal is, you need to figure out how long you will take and to have a deadline for it. Now this is super-important. If you don’t put a deadline – you’ll just drift away and chances are you won’t achieve what you want.

Setting Financial Goals

Courtesy of Blomberg: Your Money

4. Get the financial numbers out

This is the hard part. For example - how much do you need to save every month so that you’ll get five thousand dollars by the end of the month. Or let’s make it harder (!!) – how much you need to save every month so that when you retire, you can spend a thousand dollars every month for the rest of your life.

5. Be prepared to make adjustments to your financial goal

Well, we don’t know the future. For now, saving one thousand every month may be enough to set for your retirement, but in the future, who knows, you might need more than that. Or, Paris isn’t a place you wanna go anymore (coz you just broke up and you’re not having that romantic feeling anymore) but instead you just wanna let loose and go crazy in Las Vegas. Whatever it is, just make the changes as you go along.

To sum it up, financial goals are something that you can set and by following the simple steps above, it can definitely be achieved by you!

Other posts on personal finance that you may be interested in:

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Categories : Make money tips, Personal finance, Retirement

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