The importance and value of financial security is probably one thing that everyone can agree on. In today’s uncertain economy, you need to take action to solidify your financial future. How do you do that? It begins with setting goals and taking steps to meet those goals to reach the financial security you want.
Why is it important to set goals?
You’ve probably had goals set in other areas of your life at one point in time. Think back to those goals you set and you probably are reminded of how those goals gave you something to focus your efforts on. Without having goals, it’s almost impossible to plan for anything. For example when it comes to finances, not having any goals can cause you to be short-sighted meaning you’ll find you have inadequate funds for big things in life like vacations, college or retirement.
So now that you know why it’s important to set goals, think about this some more. Do you have goals set in your life and what are they? Don’t think just short term goals but long term. For example when it comes to your money what do you want the purpose to be – what do you want it to do for you?
Setting Financial Goals
- Write it down. Sure you can think about a goal in your mind but it’s easier to ‘forget’ things if you don’t write them down. When you write your goals down, write it in pencil so that you can modify them if need be. There doesn’t have to be any specific order you write them down in either, just as long as you get them out on paper!
- Specific. Make sure you are setting specific goals. Think back to number one above and what you wrote down. For example let’s say one of the goals you wrote was “I want to buy a new car.” That isn’t a very specific example. It’s pretty generic as there are thousands of different cars out there and you didn’t give yourself a timeline. So try making it more specific like “I want to have $3,000 saved by December so I can buy a new car.” Now that you have a specific monetary goal and specific timeline you can put into place some action steps to work your way towards that end goal.
- Break your goals down. The last example in number two above where we broke the car buying goal down into a more specific one can be broken down into an even more specific/smaller goal. If you are struggling to make ends meet now as it is, you might think that saving that $3,000 for a car is nearly impossible. Instead don’t look at it in the large chunk of $3,000, break it down into a more honed in goal like “Every two months I want to save $500 so that by the middle of the year I have $1500.00 saved towards the $3,000 I plan on saving by December to buy a new car.”
Of course your goals may be different. These are just examples of making a specific goal and how you can break it down into even smaller goals.
- Research and read. Pick up some money magazines once you’ve set your financial goals and wrote them down into specific ones. You may also want to consider talking to a financial planner/advisor. They can help you get started and stay on the right path to reaching your goals.
- Evaluate and re-evaluate. While you don’t want to be evaluating every week (or you can if that works for you) you should take a look at where you are at every couple months. See if your goals have changed or if you’re still on track to meet those goals by your timeline you set. If things have changed or you find that you aren’t on track, you can re-evaluate and make adjustments to your timeline to account for economy changes or changes in your life.
When it comes to your financial security and financial dreams, you should work smarter not harder to achieve them. What does that mean? Simply put, a little bit of strategy, setting goals and taking action steps can help you reach the financial dreams and security you want.
Andrea is the Chief Chick of Smart Money Chicks. After filing BK twice (once because she panicked, second time because the pro messed the first time up), she realized that it all could have been avoided if she understood more about how her Finances worked and the options available. At that point, she wanted to help as many as she could never make the same mistakes again. Our Promise is that all the content you read on here is created or edited by Andrea