Here are four steps you can apply to any financial goal setting exercise:
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.
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.
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.
Break your goals down into three separate time categories. B y 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/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 with your financial goal settting plan. 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.
These are just some of the things that you can do when beginning your financial goal setting plan.
The steps to setting goals successfully don’t change, only the methods that you use to go about it.
For example: when it is career wise, work to get noticed; for relationships, work on maintaining your intimacy or getting it back; in financial goal setting, work to save and invest money etc.
It really is that easy.
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