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One of the keys to yielding wealth is financial planning. And you can’t have good financial planning unless you set financial goals. Defining your financial goals is an important part of the process. So, clear out an hour or so (or even clear out 15 minute chunks to tackle one goal at a time) and make defining your financial goals a priority.
Keys to defining your financial goals
When defining your financial goals, it is important to keep a few things in mind:
- Be specific. You have to be specific. If you want money for a vacation, set this financial goal: “I want to save up $6,500 for a trip to the Caribbean.” This also works in “I want $1 million by the time I retire.” Do some research and find out what, exactly, it is that you will need. Then make your goal specific.
- Be realistic. This is another key. You need to honestly evaluate your financial situation and then determine what you can do REALISTICALLY in terms of meeting your financial goals. If you haven’t started saving for retirement, and that milestone is only 8 years away, $1 million isn’t very realistic in most cases. Setting financial goals that are attainable means that you have to take a brutally honest look at your financial situation.
- Make a plan. When setting financial goals, it is vital to make a plan. If you want to save up that $6,500 for a vacation, you need to figure out what you should do. If you want to make the trip in a year and a half, you need to plan to set aside $361 per month. Put it in a high yield online savings account each month, and you’ll be pleased when you get a little more out of what you put in. If you can’t put in $361 a month for the next 18 months, revise your plan. Look at things realistically and say that you’ll go in two years ($270 a month).
It doesn’t matter how big or small your financial goals are. If you carefully consider what you want, and what you can do, make a plan to get there, and then STICK WITH IT, you should be able to attain your financial goals.
