4 Steps to Setting Financial Goals

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#GOALS

Does that look familiar? Well if you are part of social media I guarantee you have seen it time and time again.

The picture below is a prime example, it’s a beautiful breathtaking travel pic and if you look to the right you will see #goals.

I can see why this would be someone’s goal, heck I want it to be mine.

The word “goal” has become the new way to say “I want something.” It has been so overused to the point my 11-year-old niece is walking around talking about “Those Jordans are goals.”

Excuse me “WHAT!?!?”

I guess her goal is to get a job also. But I highly doubt it and that’s the problem.

We set goals or say we have #Goals but we really don’t want to work to achieve them. They simply just sound or look good.

What is a goal?

A goal is something that you are trying to do or achieve in which effort is directed to obtain.

The keyword is effort.

Successful business people, top athletes and anyone wanting to achieve success, set goals followed by great effort. The whole reason you’re here is that you want to achieve lasting financial stability, correct? So, you need to set goals even before you start a budget or any other step to getting your finances in order.

Moment of truth – When I first began to budget about seven years ago, I jumped right in. I didn’t set any goals for what it was that I wanted to accomplish through budgeting. I just knew that people who were financially responsible had a budget. Guess what? My budget was an epic fail. I don’t think I could get through a whole week before I was buying something that I hadn’t budgeted for. Then I would make an excuse like “It was only twenty bucks.” Why? Well, because I failed to set goals.

Setting goals gives you a long-term vision of where you want to see yourself and it also gives you that short-term motivation to drive you to succeed. Goals have a way of focusing you on a specific aspect of your life and helping you organize your time and resources so you can make the very most of it.

So If you can take the time to set and take care of your biggest financial goals first, you will be able to get to those other goals that seem to be more enjoyable while having more time and money to enjoy it.

Not sure where to start? Don’t worry; I’ll help you get started by sharing four easy-to-follow steps:

Step One: Prioritize

Start by listing your priorities. If you don’t know what’s a priority then just start writing what’s important to you and your family.

You would be surprised how many individuals when you ask them “What are your priorities?” Really can’t give you a direct answer. They will literally say 100 things are priorities and that’s because they have never really sat down and thought about it.

You have to know what’s important to you and your family.

Getting out of debt?

Building an emergency fund?

Saving for a car?

Now, out of that list of priorities, we want to focus on your #1. This will become your first financial goal.

You may be asking “What if I have more than one #1?” Well, assess their value. Ask yourself and/or family which one carries the highest value to your family and that’s your true #1. The reason choosing only one is important, is because this will not only help you realize your goals but it will also allow you to focus and speed up the process.

Step Two: Set Specific Goals

During my undergrad, I learned about what they call SMART goals. It can be applied to any area of your life where you are setting goals. The idea behind SMART goals is that goals should be:

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Timely (Deadline)

So when you are thinking about your financial goals make sure they line up with this idea. For example, let’s say your goal is to pay off your credit card debt. To apply it to this method you would take the following approach:

SPECIFIC – what is it that you want to accomplish?

MEASURABLE – you are able to measure your progress. How often will you check you check your progress?

ATTAINABLE – make sure your goal is attainable or achievable. The last thing you want to do is set yourself up for failure. 

RELEVANT– let’s make sure your goal is relevant to your priorities, you don’t want to set goals and it is of no relevance to what you or your family has set out to accomplish.

TIMELY – ask yourself “What’s my time limit in reaching my goal?” What can I start doing today, next week, or next month?

Step Three: Make An Action Plan

Sometimes you can get so focused on the outcome that you forget about doing what it takes to make your goals a reality.

An action plan is a way to make sure your vision is made concrete.

Each step or change should include the following:

  • What actions or change will need to occur to accomplish goal
  • Who will be responsible for these changes or actions
  • When will this go into effect and for how long
  • What resources are needed
  • Communication

Write down each step, and then cross off each step as you complete it, this will help you realize that you are making progress towards your ultimate goal. This can occur daily, weekly, or even monthly just make sure your plan is in place. Financial goals are often big and demanding and usually are long term. So make an action plan to keep you focused.

Your plan should be complete, clear, and current.

Step Four: Commit, Commit, Commit

Remember, you can’t just set a goal and forget about it as if someone is going to do it for you.

Goal setting is an ongoing activity, so when one of your goals has been accomplished you should be setting another one.

Is this to say that all goals are going to go as planned? Not at all!

But you want to make sure your goals stay relevant to your current season. So maybe you had a decrease in your income, or maybe you had a sudden windfall of money, both of these require you to tailor your goal to your current situation, which will cause a change to your action plan. But the key is your committed.

Wrap Up

Now that you know how to create a realistic long-term financial goal, you can set some short-term goals that will assist you in reaching your long-term goal. This will keep your momentum going.

So if you have a long-term goal of paying off credit card debt, you can have a short-term goal of paying off your credit card with the lowest balance by also applying the SMART method.

You can simply take a percentage of your paycheck for the next thirty to sixty days and put it toward that specific credit card. Then, you can keep increasing that percentage as you pay off each card until your goal of paying off your credit card debt has been accomplished.

Try including your goals into your budget, so that way you have a plan to direct you.

So whatever it is that you need to accomplish, rather it’s setting up auto deduction on payday towards your credit cards or contributing to your emergency fund, get it started TODAY.

Tell me about your financial goals?

As you think about it remember the key points to setting your financial goals:

  1. Prioritize
  2. Set Specific Goals
  3. Make an action plan
  4. Commit

What will you decide to accomplish today?

 

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2 Comments

  1. Shauntya August 2, 2017
    • Jasmine Golden August 2, 2017

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