How to Set Financial Goals
Do you have a dream, like wanting to buy a house, sending your children to college, and having a comfortable life after you retire? Sounds like the typical American dream, right? Is it really just an idea in your head, or is it possible to make it a reality? Your questions will be answered by setting financial goals.
So how do you set financial goals?
The first thing you’re going to do is to make a SMART goal.
What is a SMART goal?
SMART stand for:
S – Specific
Unlike dreams, you must set goals that are very specific. If you make goals, you don’t say “I’m going to send my son to a good college”, instead say “I’m going to send my son to Harvard University”. Never forget to always make straighforward goals if you want them achieved.
M – Measurable
When you make goals, it must contain a particular amount or quantity. Make goals like “I will cut household cost down by 75$ for this month”. Making measurable goals will set your mind to achieve that specific amount; and, as an effect, making your goal easier to achieve.
A – Attainable
What separates dreams from goals is that goals are attainable. You make goals that you can achieve like “I will ride a bus to work instead of riding a taxi”. Don’t make goals that are almost impossible to attain; you’ll just get discouraged. Goals come in small ways; but it shows great results overtime.
R – Realistic
You must aim a little high, but hit a bit lower. Most goals are never achieved because they are too much to handle resulting to failure. Start making easy goals and slowly increase them, like “I’m going to save 1$ every day for one week and then double it in the following weeks to come.” This way, you would be able to easily adjust to the changes you make to achieve a goal.
T – Time-bound
You must set a deadline for your goals. Goals are sometimes not attained because the time you need to achieve it is not set. You make goals like “Within a month, my salary would increase by 50%, by working overtime.” Time constraint will determine how much effort you will have to exert to achieve your goal.
Another factor you need to consider on attaining your financial goal is discipline. Each goal that you create will require you to sacrifice certain things, such as time, budget, social life, and many more. You must be disciplined enough to do what is necessary for you to achieve your goal.
Your goals are more likely to be achieved when they are positive and are what you want to do. Interest is the factor that keeps you going to attain your goal. If your goals are forced onto you, like your boss requiring you to submit a report, achieving that goal will be difficult and your output is unsatisfactory compared to those you did with interest.
If you combine all these factors in creating a financial goal, then, soon enough, your dreams would become a reality.