Financial Goal Setting
Know Your Numbers
You want that house don't you? I know. I can sense it. I picked up the vibes. That's cool. Home ownership is a great investment. So...how much does your house cost? What's the required amount for a down payment. Necessary minimum credit score? Expected monthly payment? Not sure..... Oh...okay then.
Whether you're dreaming about buying a home, paying off all of your debt, or building an emergency fund... You must set realistic, attainable goals.
A dream written down with a date becomes a goal. A goal broken down into steps becomes a plan. A plan backed by action makes your dreams come true. ~ Greg S Reid
Turn your financial dreams into a goal in these easy steps!
1. Pick a goal, any goal!
So what's it going to be? What's your most pressing desire right now? Which dream keeps you up late nights and have you rising early each morning. What's that one thing that you say "if I could just...." That's the goal to work on. For demonstration purposes let's say your goal of choice is to build an emergency fund for your household. What does that look like for you? Let's take a look at the numbers.
2. Quantify that goal!
In this step, you want to take into consideration all of the costs that will be associated with accomplishing your goal and the designated amount of time in which you wish to complete the goal. The standard rule is to save income that is equal to at least 3 to 6 months of your monthly expenses. You can use that goal or you can use the starter goal of $1000. Determine the bottom line number of how much money is required to accomplish your goal. Our bottom-line number is $1000. When would you like to accomplish this by? Let's say our goal is to do this within six months.
3. Plan the path to that goal!
Once you have your target number, it will be easier to map out the steps to achieving your goal. So, we know that we want to set aside $1000 for an emergency fund within the next six months. What steps will we take to get this done? Do we need to open a savings account? Do we need to arrange a savings plan? What steps are specific to your goal? Do you need to improve your credit score? If so, by when? For purposes of our example, we will say we're going to arrange a savings plan. We will set up an automatic deposit or transfer from our paycheck or checking account to go straight into a savings account every time we get paid. Our short term goal date is to set this up by the end of the week.
4. Go for the goal!
Now go do it! There's really not much else to say here. No kidding. Go do the work. And for those moments when you fall short or find yourself tempted to fall short remember your "why". Remember why you started. Place a picture of your "why" on your mirror if you have to. Place a picture on your phone screen saver if you have to, but remember your "why" and keep pressing on.
5. Celebrate your victory!
When it's all done it's time to celebrate. It's time to reward yourself for being a good steward. You get the gold for being more than a dreamer... you are now also a doer. I think action becomes you. (wink)
Now it's on to the next goal...
(in my sweetest Texas draw...)
Go on now...get'er done!