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Setting Financial Goals
The first step in
personal financial planning is learning to control your day-to-day financial
affairs to enable you to do the things that bring you satisfaction and
enjoyment. This is achieved by planning and following a budget.
The
second step in personal financial planning, and the topic of this section, is
choosing and following a course toward achieving your long-term financial
goals.
As with anything else in life, without financial goals and
specific plans for meeting them, you will just drift along and leave our future
to chance. A wise man once said: "Most people don't plan to fail; they just
fail to plan."
The end result is the same and it is a failure to
reach financial independence.
The third step in personal financial
planning is learning how to build a financial safety net, which is like to
having a retirement fund for when you are no longer generating any income.
FOUR SIMPLE STEPS FOR SETTING FINANCIAL GOALS
Step 1:
Identify and write down your financial goals, whether they are saving
to send your kids to college or University, buying a new car, saving for a down
payment on a house, going on vacation, paying off credit card debt, or planning
for you and your spouse’s retirement.
Step 2:
Break
each financial goal down into several short-term (less than 1 year),
medium-term (1 to 3 years) and long-term (5 years or more) goals; which will
make this process easier.
Step 3:
Educate yourself and do
your research. Read Money magazine or a book about investing, or surf the
Internet's investment web sites. Do not be afraid of the stock market.
Yes, there is a potential for loss, but if you do your research and get a
trustworthy broker, you can ensure your financial future. Just remember not to
put all of your eggs in one basket.
Diversify your portfolio. With a
little effort you can learn enough to make educated decisions that will
increase your net worth many times over. Then identify small, measurable steps
you can take to achieve these goals, and put this action plan to work.
Step 4:
Evaluate your progress as often as needed. Review your
progress monthly, quarterly, or at any other interval you feel comfortable
with, but at least semi-annually, to determine if your program is working.
If you're not making a satisfactory amount of progress on a particular
goal, re-evaluate your approach and make changes as necessary.
There
are no hard and fast rules for implementing a financial plan. The important
thing is to at least do something as opposed to nothing, and to start NOW.
Sometimes when people write down their goals, they discover that some of
the goals are too broad in meaning and nearly impossible to reach, while others
may seem smaller in scope and easier to achieve.
It is okay to dare
to dream about riches, but be realistic about what you can actually do. A good
idea is to break your goals down into three separate categories of time.
One more thing to remember: by placing a time frame on your goals you are
motivating yourself to get started and helping to allow you the chance to
succeed. Just remember that you can adjust the time frame whenever you want
to.
Long-term goals (over 5 years) are those things that won't happen
overnight, no matter how hard you work to achieve them.
They make
take a long time to accomplish (hence the reason they are called long term
goals), so give yourself a reasonable amount of time, that are based on your
best estimates of what it will take to achieve them.
Examples of
long-term goals might include college education for a child, retirement plan or
purchasing a home. Whatever the case, these goals generally require longer
commitments and often more money in the end.
Intermediate-term
goals (1-5 years) are the type of goals that can't be executed overnight
but might not take many years to accomplish. Examples might include purchasing
or replacing a car, getting an education or certification, or paying off
your debts like credit cards etc. (depending on the amount).
Short-term goals (within one year) generally take one year or less to
achieve, based on the date the task is needed, the total estimated cost, and
the required savings.
What are your goals? To find out, you need to make
up a list, decide which timeline your goal fits into, detail the steps
necessary to achieve your goals, then take action toward reaching those goals.
It’s that simple.
You might be wondering where to start when deciding
how to go about to start your financial goals. These are some basic tips to
help you in making the best choices for you.
After looking at these
tips, it is best for you to go out and do some research to find the method(s)
that suit you best.
- Begin by taking 5%-10% out of each pay check and
put it in a savings account.
- Look into different investment strategies such as
IRA’s, stocks, RRSP’s, mutual Funds, personal investments etc. There
are many more and all can assist you in short and long term goals.
- Start making a budget for yourself that leaves you with
some extra money and follow it.
- Use your coupons that is why they are there. It seems
like small savings, but add together you could save 20-30 dollars at each trip
to the market.
- Shop around for bargains.
- Do not live outside of your means.
- Work with a credit counselor to get help in lowering
your monthly expenses and get rid of your debt.
These are just some of the things that you can do when
beginning to realize your financial goals. Of course, you also have to follow
the steps in the above sections on how to successfully set goals.
The
steps to setting goals successfully don’t change, only the methods that
you use to go about it. By that I mean; when it is career wise, work to get
noticed; for relationships, work on maintaining your intimacy or getting it
back; in financial matters, work to save and invest money etc. It really is
that easy.
To your Success, may you reach your goals.
Gary
Killops
Using the Plug-In
Profit Site System has help Gary Killops achieve his financial income goals
by creating multiple streams of residual income.
Copyright © Gary
Killops.
All rights reserved.
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