Ways to Set & Reach Financial Goals: 4 Easy Steps
There are few things that can offer greater personal satisfaction than achieving a goal you’ve been working hard to reach. The problem is that it can be easy to lose focus, causing your goals to fall by the wayside.
There are a number of reasons why people don’t wind up reaching the goals they’ve set for themselves. Fortunately, there are things you can do that can help increase the chance you’ll reach the next financial goal you set for yourself.
Set a Deadline
Now that you know what your financial goals are and how much money you’ll need to reach them, you’re ready to set a deadline for them! The best thing to do is to set a firm deadline for your goal and work your way backward to figure out how much time you have to be able to save for it. Are you wanting to cut back on eating out in order to use that money for something else in the near future? How quickly do you need to pay off your debt? What date do you need to have your down payment saved by? When are you wanting to go on your vacation? What time frame are you working with to work your new car payment into your budget?
Automate your financial plan
Now that you know how to set financial goals—whether it’s paying down debt, saving up for a car, or putting money away for retirement—what’s next? Time to get moving! One way to do that is to automate your finances. By setting up automatic bill pay and account transfers, it will be easier to stick to your plan for paying monthly expenses and contributing to savings.
When it comes to paying your bills and learning how to set financial goals, consider automating the bills that you pay regularly. To gain momentum with your savings progress, set up automatic transfers from your checking account to your savings account for the amount you wish to save each month. If your financial goal is retirement, you could even set up automatic transfers to an individual retirement account (IRA) so you’re consistently making progress. You could also arrange to have a portion of your paycheck automatically go into savings—before you even have time to miss it.
Picture Your Future
Where will you be? What will you be doing? Goals that are very far off, like retirement, are particularly hard because we’re wired to prioritize the now over the later. But visualizing your future — whether it’s on a beach with grandkids, skiing in the Alps, or pulling up to your home on the golf course — will help you get there.
Picture how you’ll feel when you arrive at your financial destination, and keep that image in your mind the next time you start to veer off track.
Prioritize Your Goals
Some of us have a seemingly infinite number of goals we’d like to accomplish, but all of us only have a limited number of resources available to actually achieve them. Write down what your goals are, create a hierarchy to see which goals are the most important, and then prioritize working toward them. This is when thinking about your values is crucial; a good understanding of your core values can help you focus on what matters the most to you.
You probably won’t make perfect linear progress toward achieving any of your goals, but the important thing is not to be perfect but to be consistent. If you get hit with an unexpected car repair or medical bill one month and can’t contribute to your financial goal fund but have to take money out of it instead, don’t beat yourself up; that’s what the fund is there for. Just get back on track as soon as you can.
The same is true if you lose your job or get sick. You’ll have to create a new plan to get through that difficult period, and you may not be able to pay down debt or save for retirement during that time, but you can resume your original plan—or perhaps a revised version—once you come out on the other side.