The Importance of Setting Financial Goals
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Smart Financial Goals: How To Give Your Wallet A Boost
Establishing financial goals is the perfect way to winterize your wallet and start the year strong with your financial future. Setting and investing in these strategies for your career, budget and bank account is an important key for success. Having a financial plan allows you to ensure peace of mind and make the most of your hard-earned money.
Setting SMART Financial Goals
Anyone can make a financial goal, but the key to making sure these objectives are met is to think SMART. SMART stands for specific, measurable, attainable, relevant and timely. To ensure your financial goals are set the right way, check that each one is:
- Specific – Every goal should be concise and clear. Identify the purpose and let your strategy define the end result.
- Measurable – Monitoring is paramount. Every goal should include findable points that allow you to measure progress.
- Attainable – Goals should be realistic and free of mental blocks. It’s OK to have a challenge – just make sure it’s not overwhelming.
- Relevant – Make sure that each goal is relevant to your overall plan about budgeting and saving for your future.
- Timely – Every goal should have a timeline that list corresponding cash payment dates and outcomes. Have a set date and plan for when the goal should be met.
Types of Financial Goals
When you set financial goals, it’s important to know what type of goal you’re putting in place. A few of the most common goals include the following:
- Increasing Income – Streamlining your career path can increase income. Sending side jobs, a second job, picking up unforeseen freelance tasks or taking on a tenure-based job can open more doors to meet money goals.
- Improving Credit Score – Rebuild your credit score. Trim back the number of credit cards by closing the unnecessary ones. Paying on-time bills and debts that you already have will also help.
- Spending Habits – Stay within your budget. Start tracking your spending and create small goals to pay off debt, save or invest money.
- Saving for Retirement – Start saving for retirement now. Even a small amount each month is better than waiting to start towards retirement. Make a budget for each retirement month, with the goal to increase contributions when the extra money is available. Focus on investing in stocks, mutual funds, bonds and other savings plans.
- Estate Planning – Formulate a legal will and living trust. Every will should be supported with a trust, POA and legally-binding document. Consider finding a trusted medical provider and create a healthcare directive. It’s important to list who you wish to assign fiduciary duties in the event of a tragedy.
Creating Financial Goals
Making an actionable plan allows you to reach financial goals quicker. To create a plan, it takes three steps: breaking down goals, deciding on budget action steps and finding ways to hold yourself accountable.
- Break It Down – Break down your goal into achievable chunks. It’s important to not overwhelm yourself by trying to meet all goals in one motion. Divide up each goal into smaller, measurable parts.
- Decide On Action Step – When you set out to reach a goal, decide on the steps to track success. It’s important to list out each action step in a logical order.
- Accountability – Achieving financial goals are easier when you set a plan to hold yourself accountable (it also helps to tell a friend)! Whether it’s reminding yourself in a journal, creating a positive reward structure or blending technical solutions with physical notes, sustainable change starts with holding yourself accountable.
Achieving financial goals is possible for anyone. Who you want to be is within reach, and the only things that stand in the way are procrastination, lack of strategy and sometimes yourself. Setting SMART financial goals, understanding different types of financial goals, creating a financial plan and learning to hold yourself accountable can propel success.
Start by setting goals to streamline your budget and career, improving your credit score and starting a retirement future. Take ownership of your financial situation and breathe life into your wallet! When you manage money and invest your time correctly, your finances are virtually unstoppable.