Make a list of wants and why- start assessing to reach your needs and set balancing financial goals. Question yourself: what is success to you? For some, a luxurious lifestyle with a big house and the desired car is the means of success. For others, having enough financial security to avoid stress in the future, and owning a business defines success.
Here are some Steps to Set your Financial Goals:
- Find your inspiration
- Examine your financial situation
- Think ‘SMART’
- Write them down
- Access yourself
1. Find your inspiration
Don’t just think about what you want, but also why you want it. Attach reasons to your goals to make them more successful and motivating. For example: Create an emergency fund to pay your bills, in case you lose your job. Setting goals increases your success rate.
2. Examine your financial situation
You may have multiple goals for your income, but don’t know what to do next and where to start. Start by accessing your income, budget your financial resources, your income tax situation, and net worth. These four things will help you determine your goals. Check your financial score which gives you more flexibility to set the goal. A low score points more attention to your goals. Here is the list of financial goals example below:
1. Create a budget: If you don’t have a budget, make one. A budget maintains your goals on track by preventing under-saving and overspending. Create a 50/30/20 budgeting, 50% of your income towards needs, 30% for wants, and 20% for the debt repayments and savings.
2. Build up an emergency fund: An emergency savings that pays your bills during a financial crisis, like job loss or sudden medical bills.
3. Retirement savings: You may have a decade until your retirement, but it’s wise to start saving for it as soon as possible, so that you have enough during your retirement time.
4. Pay off debts: Focus on high-interest debts pay-off such as toxic credit card debts. Later, pay your low-interest debt, like mortgages.
3. Think ‘SMART’
It is believed that a strong basis of setting any goal is to create it in a ‘SMART’ way:
- Specific
- Measurable
- Realistic
- Achievable
- Time-bound
Planning a vacation? Decide the destination, when you want to go, and estimate the cost. Make sure your goal is doable, and if not, try making adjustments before scrapping the entire idea.
4. Write it down
After you’ve identified your goals, write them down. It helps to keep your objective clear and organized. Make spreadsheets and track your progress periodically.
5. Access yourself
Setting goals doesn’t have to feel stressful. Making progress and completing objectives helps you focus on other exciting goals to make money. Reward yourself for doing it. Making more money can help you invest or start a business.
How to Achieve Financial Goals:
The best way to achieve financial goals is to create priorities in your goals.
While examining your financial goals, you will find some are broad and far-reaching, and others are narrow and in scope. There are three categories to set your goals:
1. Short-term financial goals: These take one year to achieve. For example, taking a vacation, buying a refrigerator, or paying off debts.
2. Mid-term financial goals: These are not achieved right away but don’t take too many years. For example, purchasing a car or finishing a degree.
3. Long-term financial goals: These may take several years to achieve and require longer commitments. For example, buying a home, saving for your retirement, or saving for your children’s education.
Why You Should Set a Financial Goal:
There’s always a thread for financial goals. Some need help with their taxes, and others need assistance in their retirement savings. Maintaining a financial goal makes your life easier to assess your needs and expenses.
