How To Reach Your Financial Goals
The great Zig Ziglar once said “If you aim at nothing, you’ll hit it every time.”
Goals serve as your financial compass. They point you in the direction you want to take your life. Whatever you want to achieve financially, is much more likely to come to fruition by setting out goals and having a plan of attack.
I suggest breaking your goals down into short-term and long-term.
Goals should be five things (SMART).
I’ve found it beneficial to list out your goals with the following fields:
- What is the goal and what amount is needed
- How much do I need to set aside each month to achieve it
- Is it realistic for me to achieve this goal, why or why not
- By what date will I reach this goal if I follow my plan
The goals you set will be specific to you and your situation. Before you fill these out, take some time to think deeply about what you want to achieve financially.
To help with your thinking, here are a few examples…
Short Term Goals:
Build an emergency fund of $1,000 to cover any unexpected events
Save for a vacation to Hawaii next summer
Save for buying my family Christmas presents this year
Save for a down payment on a rental house for extra income
Long Term Goals:
Pay off all my student loans in 5 years
Contribute to my kids’ college funds every year
Pay off all of my credit-card balances
Save more and retire early at 60
Buy a rental property in 10 years
Simply listing out goals rarely does you any good.
You need to know exactly what amount you need and exactly how you’re going to get there.
It helps to break down the larger goals into smaller ones.
Don’t lose sight of the big picture, but break the big picture down into steps.
“Pay off $20,000 in credit card debt” can be overwhelming and paralyzing.
Instead think of it as “Contribute $500/month to pay off credit card debt in 3 years.”
If you’re keeping a budget and spending plan, incorporate your goals into this. If you don’t have a budget, feel free to use ours here: Free Budget Template
To take it one step further, set up auto-pay for your goals so you don’t have to think about them each month. With auto-pay on a certain day of the month, the money is automatically transferred, saved, etc.
The above should give you a clear framework and make you more prone to take action.
If you have any questions or would like help setting financial goals, contact us today!
-Your Friends at GPIS
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