Setting Financial Goals

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Creating goals is a powerful way to achieve success in any area of your life. Whether you’re looking to advance your career, improve your health, achieve a personal dream, or reach financial milestones, setting goals can help you stay focused, motivated, and on track to achieving your desired outcomes.

When I work with clients, helping them define their goals and assigning financial values to those goals is a big part of the financial planning process. While most clients have a common set of goal categories like when they want to retire or how to handle their children’s educations, every client has different thoughts and feelings about the specifics.

Goal setting is a very personal process and there is no right way for everyone. Here are two ways to set goals to get you started:

The SMART Method

S

Specific

Set goals that have purpose and depth! In the end, your goals should include specifics about people, places, ages, and dates.

If you have specific dollar amounts, great! Use them. But you don’t have to worry about the dollar amounts just yet. It’s all about getting the main ideas down at first.

M

Motivating

Your goals should provide motivation to take the actions necessary to achieve them. Dream about what future you would like to have. Save pictures and stories about others who have done it. Your goals should be what keeps you going when you just want to stop.

You are going to have some goals that are important that don’t seem motivating at first. Rephrasing a goal can make it more motivating. For example, “Save $1,000 in an emergency fund” can be “Have $1,000 in the bank so I don’t have to take on credit card debt!”

A

Attainable

It’s fun to dream big, but it’s important to recognize the difference between a realistic goal and an unattainable one. With hard work and good financial habits, many people can achieve a fulfilling life supported by their finances, but owning a 150′ yacht or taking weekend trips to the Riviera is out of reach for most. Aim high but set achievable objectives based on your own circumstances.

R

Relevant

Having goals that align with our values is the key to living a fulfilling and meaningful life. By taking the time to reflect on what matters to us, we can create goals that are truly meaningful and help us make progress towards what is most important. This approach allows us to focus on the things that matter most, while avoiding becoming spread too thin along the way.

T

Time-Based

Setting time-based goals allows you to create a goal timeline, so that you can see exactly when each goal should be accomplished. Time targets also help motivate and focus your efforts, as they provide a sense of urgency to get the job done. By giving yourself realistic deadlines for each goal, you are more likely to stay on track and reach your goals in a timely manner.

Emulation

One exercise that might help is to look at the people around you and how they live their lives. Look for people who you say to yourself, “I want to be like them” then start thinking about why that is. Do they use their resources to make a meaningful impact in the family and community? Do they have the freedom to travel or take time off work? Do they go to sporting events or concerts regularly?

Identify the things you like about their lives that are desirable and create goals around those traits.

Picture or Story Book

As you go about your day-to-day, find pictures or stories that represent what you want. It could pictures of a vacation, or pictures of your family having dinner together. It could be a boat or of golf clubs. It could be pictures of your church or favorite charity. Find activities, places, or things that represent you. As you sit down to develop your goals, keep them in view to help remind you what is most important to you.

What to Do Once You Have Goals?

Make them visible to keep them top of mind. Put them in a place you will see them often.
Turn your goals into actionable steps so you can start working towards them.
Declare them to others. Accountability is a power force.
Revisit them. Goals will change as you change. Updating your goals is ok.