Goal Setting Tips and Resources: Finance 101
Goals are an important part of life. Financing goals are where you want to be financially in the next five, 10, or 20 years. You can also set goals for the next year. You have to think about both big and small achievements when you are coming up with financial goals.
Resources for Goal Setting Tips
With so many goal setting tips, it can feel overwhelming. However, there are plenty of resources to help you stay on course. Financial apps that help with goal tracking can be useful. Technology offers a number of alerts and prompts that can give you a nice road map.
There are also old-fashioned methods. You can have pictures of your goals added to the refrigerator door or some place that you see a lot. When you achieve your money goals, there is nothing wrong with a little celebrating.
Staying organized is going to be the key to your success and a crucial step in meeting financial goals. There are several budgeting apps and tools that can help you stay organized and on track. When it comes to budgets and financial goals, the more organized you are, the better off you will be.
Goal Setting Tips to Make It Easier to Reach Goals
Regardless of your financial goals, these tips make it easier to reach your objectives.
Create a Detailed Plan That Is Still Flexible
Ask yourself how you are going to get from Point A to Point B. What is the time frame you want to set for yourself? Now, what do you have to achieve each year and month to make this happen? Your plan for your goals should involve clear answers to your questions. However, at the same time, you need to keep some flexibility since you never know what the future can hold. Major life changes may alter a financial goal but many goals are usually ended by just a minor life change. Your entire plan shouldn’t fall apart if you struggle to make just one step of the plan.
Write the Goals Down
Don’t underestimate the power of committing goals to paper. When you write your goals down, it forces you to clarify them. When you only have a vague sense of what you want to accomplish, you will get nowhere.
Add Some Reality to Your Plan
In order to add some flexibility, you need to add some reality. Some people establish goals that are just outside the realm of what can be achieved. Someone who is living paycheck to paycheck won’t be able to get out of debt in a year. You need to look at what you can realistically do. For example, if you have a goal to be debt-free in five years, are you able to come up with 1/60th of your total debt this month?
Track Your Expenses
A budget won’t work if you set it up and then just leave it alone. Once you set up a budget you still have to keep up with your spending and track your expenses.
Set Small Milestones
One of the big goal setting tips is to set small milestones. If you want to save $50,000 for a down payment on a house in five years, start breaking this down. You will need to save $10,000 a year and $800 a month and $175 a week. When you are able to break down your goal into smaller pieces then the day-to-day actions you need to do are easier to see. It’s easier to figure out that you need to do to save $175 this week in order to get to $50,000 in five years.
Automate It
Goal setting tips are great, especially if you don’t have to think about them. Once you have the goal broken down into smaller milestones then you can automate the entire plan. Set up a savings transfer at your bank to transfer your amount per week into your savings account. This locks in your plan that moves you toward your goal without having to make decisions and it puts you in a position where you can focus on how to live after making room for your goal.
Keep It Out of Reach
Once you start to begin your savings, it’s easy to tap into those savings for other purchases. There should be no easy way to access that money since an impulse purchase will do nothing but undermine your goal. You shouldn’t be able to get your savings via an ATM card.
Reevaluate Your Goals
Life changes so your goals can change. It’s okay if your goals change. You don’t want to abandon one of your goals just because it’s hard work. However, don’t just hold onto an old goal because you feel like a failure. Accepting that you are heading in a different direction than you once thought isn’t a failure. Reevaluate your goals every six months or a year. You could even do it every month if that makes you feel more comfortable. Don’t be afraid to make changes so the goals fit where you currently are and where you are going in the future.
Narrow Your Focus
When you are working on goal setting tips, you can have multiple goals at once but it may be helpful to focus on just one goal at a time. You don’t have to completely stop focusing on everything else but choose one to focus on. Your focus will help you accelerate the process and then you can accomplish your goals much faster.
Share Your Goals
If you share your goals, you can have more success. Sharing goals can be hard because you don’t want people to know that you failed. For this reason, sharing goals can motivate you even harder to make them happen. If you keep your goals to yourself then it’s much easier to start making excuses. You can even take it a step further and document your progress on a blog or social media and share your goals on the Internet.
Celebrate Small Wins
It’s not possible to accomplish financial goals overnight. Celebrating small wins can help you keep you motivated to stay on journey and then accomplish your ultimate financial goal. If your goal is to save $10,000 then you may want to celebrate for each $1,000 you are able to save.
Why Should You Set Financial Goals?
If you don’t set goals then nothing about your current finances will change. You will stay where you are. Financial goals can give you a voice and direction to your dreams. Good, clear goals can help provide a long-term vision for your finances. The goals can help guide you and act as guardrails to keep you on track. Goals can also allow you to measure your progress and ultimately achieve the financial success that is the most important to you.
Examples of Financial Goals
Before you need to work on goal setting tips, you need to come up with financial goals. There are a number of different financial goals that can work for your situation.
Create and Stick to a Budget
One of your goal setting tips is likely going to be sticking to your budget so you first need to create a budget. Budgets are useful to define the income and expenses in your household.
Pay Off Credit Card Debt
The interest charges on your credit card eat up a lot of the cash flow that can be used for other objectives. Once you pay off your credit cards, you want to be careful to not use the card as much.
Save an Emergency Fund
The standard is three months of household expenses. Six months is even better, especially in a fragile job market. An emergency fund should definitely be a top financial goal if you don’t already have one.
Save for Your Retirement
Delayed gratification can be a hard concept, which makes saving for retirement more difficult. Saving for retirement should be as exciting as the consumption attitude that is all around everyone.
Live Below Your Means
One of the best ways to get ahead is by getting behind. Getting ahead with your money is possible if you start living on less than you make. When you spend less than you make in a month then you can put money left over toward different savings goals. The easiest way to make sure you are living below your means is to stick to your budget. Living below your means can also make it easier to stop living paycheck to paycheck.
Improve Your Credit Score
In order to get a home or another big purchase, you need a loan. In order to qualify for a lower interest rate, you need the best credit score possible. An improved credit score will save you money in the long run so make it a goal to get that higher credit score.
Travel More
Not all goals need to be so serious. Maybe traveling is one of your top money goals so you want to start putting together a fund in order to take the trip of your dreams.
Save for Your Child’s Education
One of the biggest financial myths is that it isn’t possible to go to college without going into debt. Debt free college is possible. Don’t feel pressured to make this a goal but if it is something you feel strongly about then it’s not as hard as you think.
Develop Skills to Improve Income
This doesn’t mean you have to go back to college for another degree but it may mean taking on some responsibility or additional training at your job. It could also mean finding a mentor to provide you with feedback or tips, or networking to get more contacts and knowledge.
Develop a Goal Chart
Developing a goal chart can make it easier to see your goals and is one of the top goal setting tips. There are five steps to follow to set up a goal chart.
1. Write down your financial goal. The goal should have a timeline, be measurable, action-oriented, and realistic.
2. Decide if the goal is short term, mid term, or long term and then work on a timeline for the goal. The timeline can change at any time based on your situation.
3. Determine how much money you need to save to reach your goal and figure out the best way to save money. We suggest opening a savings account. Below we listed some of the best options on the market for you:
4. Think of all the ways you can reach that goal. This can include cutting expenses, saving, earning extra money, or finding extra resources.
5. Decide which is the best combination of ways to reach your goal.
Short-Term Goals
Your goal is short term if it is narrower in scope. A short-term goal can include purchasing furniture for the home, minor home improvements, or saving for a vacation or car. Short-term goals can also mean getting a handle on your budget, eliminating credit cad debt, and adjusting spending habits.
Short-term goals can help you improve your spending and cut back on any unnecessary spending, such as a landline or premium cable channels. If these goals sound daunting then a short-term goal can also be finding a financial counselor to help you set a plan and get your priorities straight.
Mid-Term Goals
Mid-term goals are usually planned for around three to 10 years. Examples of mid-term goals can include saving enough for a down payment on a home, paying off student loans, starting a business, paying for your wedding, or taking a dream vacation. Another mid-term goal can be coming up with multiple income streams. You don’t need to work every weekend but instead, figure out how to monetize a hobby or start a side business.
Long-Term Goals
The ultimate long-term goal is funding retirement. You can never get this started too early with automated deposits into tax-advantaged investment accounts. Other long-term financial goals can include paying off your home, living debt-free, and helping your kids get through college debt-free.
Is It the Right Goal?
With so many goal setting tips, it can be easy to get overwhelmed with goals. You need to determine if it’s the right goal for you and a goal that you really want to accomplish. If you don’t believe in your goals then you are less likely to achieve them. Many people set goals without even considering why they want to achieve those goals. When you are setting your goals, you need to consider your why behind them.
Knowing your why can help you achieve that particular goal and it’s important to success. For example, if you don’t really want to buy a house then you won't be motivated if you set a goal to save for a home down payment.
Finance. Meet Goalry.
Reach Financial Freedom
You won’t feel motivated, even if you feel pressured to make this a goal because your friends and family members are buying houses. Take the time to really think about what matters to you the most when it comes to your money and then pick some goals you want to work toward.
In order for it to be a goal, instead of just a wish, it’s important you have the clear definition of success. For example, you can’t just have a goal of wanting to retire early and say you are saving enough to retire early. This goal is too vague and doesn’t give you anything to work toward.
When you set goals, you need to be detailed about what you want to accomplish and define what that means. For example, if your goal is in fact to retire early then this means you need to figure out at what age you want to retire, determine how much money you need to do so, and then decide how much you should save each month in order to achieve this goal.
When you set up a goal you can’t achieve, you are setting yourself up for failure and this may discourage you from making financial goals in the future. As you start to establish measurable and specific goals, make sure you can achieve them. This doesn’t mean you shouldn’t push yourself to accomplish some big goals.
You should set goals that are a little out of reach but only if you are willing to push and go that extra mile. Don’t make objectives impossible. Retiring when you are 30 when you are already 28 can be out of reach unless you win the lottery. However, you could make a plan to retire at 40 and accomplish it if you are able to buckle down.
Final Thoughts
Goal setting is an important part of determining your financial future. With the right goal setting tips, you can set goals that mean something to you and have the right tools and resources in order to accomplish them. Determine if the goal is right for you based on your current financial situation. There are different short-term, mid-term, and long-term goals based on what you want to accomplish. Once you have the goals in place there are plenty of things you can do in order to start working toward your dreams.