Everyone has an idea of where they would like to be financially in life. Whether it be retiring with a certain amount in the bank, or simply saving up enough money for a nice vacation, having goals for your finances can be a motivating way to stay on the right track. So how do you effectively set goals? Here are a few easy steps to get you started in the right direction:
What Do You Want?
The first step to any goal setting exercise is to find out what you want. Do you want to increase your savings? Do you want to send your kids to college sans loans? Whatever your objectives are, you need to define them before you can make a plan of action. Having a “why” behind your goals will help you stick with the plan even when the going gets tough.
Get Your Priorities Straight
After you have decided on all of your financial goals, it’s time to prioritize. Chances are you are not going to be able to work on all of your goals at the same time. You need to figure out which goals are the most important right now, and when it has been completed, start on another one. Taking it one goal at a time will help you stay focused and keep you motivated while you see your progress every month.
Of course the “B-word” is going to show up in this list! Budgeting is arguably the single most effective way to reach your financial goals quickly. When you have a budget, you are telling your money where you want it to go and not the other way around. You can work your financial goals into your budget easily, and if you stick to your budget, you will see progress on your goals quickly.
Once you start working on your goals, it’s important to keep track of your progress. This helps you see where you are and how far you have to go. It will also keep you motivated to finish what you start. Likewise, if something isn’t working for you, you can go back to where you have been tracking your goals to see what is wrong and make the necessary adjustments. Reaching your financial goals is just easier when you keep track.
So there you have it–easy, sensible ways to make financial goals and stick to them. It’s not hard, it just takes a little work to get it going. If you follow these simple steps, you will be on your way to financial freedom in no time.