Goal setting is tough enough without adding the word finance into the mix. Many of us are often hesitant to tackle the job of setting financial goals, especially when it comes to the long-term goals that set us up for our financial future. It’s not fun, it’s not sexy…heck! It’s actually pretty boring, right?! Even though setting financial goals is something a lot of us already do (sometimes without even thinking about it), like when we plan to save up for that vacation or for the down payment on that new car, but it’s only a part of what we need to do. In setting financial goals, we’ll have to learn how to efficiently control our day-to day financial affairs, otherwise commonly known as creating a budget. The financial planning process starts from understanding and examining our current situation, gathering relevant financial information, setting up financial goals and finalizing a plan in detail. Contrary to what most people think, doing this will allow us to do the things that give us pleasure and satisfaction while also having a positive effect on achieving a comfortable lifestyle later in life.
For setting financial goals, selecting a simple course of action that we could follow will guide us to financial success. First, we need to identify and write down our goals which will help us to visualize our dreams and desires. This may include saving to send kids to college, buying a brand-new car, a down payment on a home, going on vacation, paying off high interest credit card debt or planning for our retirement and how we want that retirement to look. Then, we need to take some time to break down our monetary goals into several smaller manageable time driven measures. These include short term, medium term and long-term goals. Doing this will create our goal setting process and as we set those targets, we need to make sure they’re quantifiable and achievable. Another important part of the process is researching to educate ourselves about investing and the various investment vehicles and strategies by, reading books, magazines, investment sites, etc. to which determine which approach would be best suited for our goals and risk tolerance. Last, but certainly not least, we need to review our progress occasionally so as to notice where we need to make alterations and to chart our financial growth. We’ll want to periodically check our progress monthly, quarterly, or in any interval we feel comfortable with, but at least annually, to be able to confirm that our program is working, and our goals are on track.
Understanding and analyzing our financial decisions allows us to realize how those decisions are interconnected and the impact one decision can have on other financial decisions. This is why a comprehensive plan is so necessary, because without it, will be challenging to reach our financial goals. The benefits of controlling our money properly is to ensure we control our spending and have the capacity to save enough in order to attain financial independence in the future. Going through the process of setting financial goals and being consistent in periodically reviewing them along the way will get simpler and easier as we go. The significant thing is to do something as opposed to nothing, and to start NOW!
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