Establish Financial Goals
After writing 5 Reasons People Suck at Saving Money, Marg wrote an article about establishing financial goals which is reason number three in my article…..
Experts tell us that few people set goals. When they do, they don’t always put them in writing or monitor their progress. Not having goals is like going on a trip without knowing where you are going. With no map or plan you can end up anywhere. Goals are very important. Many people use them unconsciously but not to the fullest potential. Goals help with weight loss, our careers and many other areas of our lives. Money affects you from the time you leave your parents home until the time you die. It plays a crucial role in all the events of your life. Setting financial goals helps you manage and control your money.
There are certain times, like the beginning of a new year or lent, that we hear about goal setting. Typically these goals involve only one thing and are short lived. What I am recommending will take more thought and time. You could set a vague goal such as “I’d like to be rich.” This is more likely to occur if you come up with the plans to make it happen. Sometimes young people feel they have their whole life to set goals. But like the country song they go to bed one day then wake up and realize they are old. You will benefit more by setting financial goals early in life. As you get older it becomes more challenging because you have fewer choices.
Sometimes people don’t know how to start the process of creating financial goals. It encompasses all areas of your life. Big issues like buying a home, having a family, providing for children, and retirement need to be discussed. Thinking about these requires you to go deep, perhaps explore your attitudes and feelings toward certain issues. If you have a partner, they should be involved. Sometimes this can lead to disputes. But don’t avoid doing this because it is difficult. Life is going to happen, whether you plan or not and planning makes it easier. If you feel that you need help, consult a Life Coach, they are trained in this area.
The experts say you need to have short term and long term goals. One year, five years, tens years…, middle age, and retirement. Decide how much money you need to make at each stage of your life. What do you need to do today to start making this happen? Once you’ve decided what your financial goals and plans are, write them down. Preferably in a notebook so you can refer back to them. Review and measure your progress regularly. If something isn’t working you might need to make an adjustment.
Retirement is one area of your life that you definitely need to plan for. My parents were able to get by on their social security living in a house that was paid for. With the current mortgage crisis and high divorce rates, I’m not sure how many people will payoff their mortgage before retirement. With the pension fund scandals and today’s corporate environment, you can no longer depend upon your employer to take care of you. The one thing everyone has contributed to for years, social security, is projected to end.
Our children need to do a better job of planning for their futures than we did. Credit card debt and home foreclosure is the highest ever, money in saving and liquid assets are the lowest ever, and no one seems to be able to determine if we are in a recession or not. It is difficult to save money when you are young, especially when there are children. The earlier you start the less you have to save. Choices and sacrifices have to be made. You may need to give up something today to have a better life tomorrow. With planning and goal setting you have more control over your future.
You work hard for your money. Why not let it work for you?
Related Posts
- How to Set Financial Goals as a Couple
- Personal Finances and the Decades of Your Life
- How to Set Financial Goals for Couples
- Thinking about Retirement
- 5 Reasons People Suck at Saving Money
- The Importance of Teaching Your Kids to Save
- Your Career and Your Money
- Money is Not Everything
- How to Save Money for a Down Payment
- How to buy an IRA
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[...] Benoit presents Establish Financial Goals posted at Financial [...]
[...] Benoit presents Establish Financial Goals posted at Financial [...]
Very well said “Not having goals is like going on a trip without knowing where you are going”.
Setting up measurable goals is a very important first step in our journey towards financial success. All our investing should then be geared towards achieving these goals.
This methodology is called Goal Based Investing, and if you’re interested, you can read more about it on my site at: Goal Based Investing