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How To Set Financial Goals and Actually Reach Them

Published on May 5, 2019 8:00 AM EST
How To Set Financial Goals and Actually Reach Them

Financial goals are one of the most popular areas of personal pursuit for most working adults. Whether it’s a goal to buy that first car, take a long dreamed of vacation, purchase real estate, pay off loans and credit cards, build your savings for a “rainy day” or invest for retirement, it takes effort to achieve your financial objectives.

And whether it is a New Year’s resolution or an undertaking brought on by frustration over economic woes, it is possible to set and achieve financial goals.

How To Set Financial Goals and Actually Reach Them

So, while there are never any guarantees, you can take some steps to put yourself in the best position to not only set the best financial goals for your circumstances but to also reach them. Here are a few tips that may help you along the way.

1.) Define and document your goal(s)

To successfully reach your financial goals, first, you need to be clear on what your objectives are. So, you need to take some time to describe them.

Your description should include the purpose that you are trying to achieve or how you will use the finances, the amount of the financial goal, the timeframe you are targeting to reach the goal, any overlaps, or dependencies across goals (if you have multiple goals you’re pursuing).

If you have more than one financial goal, set priorities based on the criticality to your success or ability to maintain your current standard of living. Be realistic and set goals based on your current financial state and not what you wish or anticipate (you can adjust the goals along the way if necessary).

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And it would be helpful to record all the information related to your financial objectives and the plans to meet them. Keeping a record of your goals and related information will allow you to review and reflect on them throughout the pursuit, so you can better decide if changes are needed, review the progress and evaluate how to remediate issues that may arise.

Documentation will help you to verify the accuracy and relevance of the goals you are setting or help you to outline what you need. Your documentation or the tool you use to record your data does not have to be formal or elaborate. You can even jot down the information in an app on your phone or tablet, but if you want to use detailed spreadsheets that wouldn’t hurt at all.

2.) Setup accountability

For any plan to succeed, you need to monitor your progress and be accountable. Accountability might mean selecting and submitting to an “accountability partner.” This selected individual or group should have your documented goals and check-in with you regularly to review your progress, encourage you, or help you find assistance if you have veered off course.

Schedule specific checkpoints throughout the period during which you are pursuing your financial goals to ensure that you can resolve issues without a significant impact on your planned completion date. Meetings should include reviewing the specific details of your plan against your current status and also evaluating it against your current financial situation.

If your case has changed (e.g., increase or decrease in income), then you may need to refine your plan. You can also establish accountability by setting up payments or saving via automatic deductions from your account. So, the power leaves your hands, and unless you make a conscious decision to undo electronic payments and deductions, your plan will likely stay on course.

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3.) Ongoing training or mentoring

Gaining a better understanding of the financial world, including investments, managing profit and loss, as well as expense and liability monitoring, will help you as you undertake personal financial planning and goal setting.

Training can be an online course, a short seminar by a non-profit or business group, consultation with a financial counselor, or it can be reading recommended books on financial goalsetting and planning.

Regardless of which you choose, increasing your knowledge of how to handle personal finances is bound to help you set, maintain and meet your goals. The more you understand about the financial planning and management process, the better you will become at recognizing what steps you need to take to achieve your personal financial goals and gain the economic security that you are seeking.

Stay on course and meet your financial goals

Achieving your personal financial goals are quite possible. But, you have to be willing to stay the course. Like most anything else, you have to possess a desire to meet your financial goals. Also, you have to be ready to build a clear plan of action.

At the outset it may seem to be a difficult undertaking, but if you are realistic and clear about your goals, document and monitor them; seek out, lean on and accept support from accountability partners as well as increase your knowledge through training and mentoring support; you will be in good shape to cross most financial hurdles and meet your goals.

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