If you do not know where you are going, how will you know when you get there? This is very true about financial goals. You need to set financial goals to help you make wise financial decisions, and also as a reward for your efforts. Goals should be clear, concise, detailed and written down. Unwritten goals are just wishes.
In order to achieve all your goals, you will need a plan. Starting from assets you already have available, you will need to determine how much more you need to accumulate and when you will need it. Don’t neglect to consider that the price of your goal items might actually increase as well. Depending upon how you invest your savings over time, you might receive interest, dividends or capital gains to help you along – you should consider this as well.
Specific
Your financial and personal goals need to be as specific as possible, because otherwise they won’t give you enough direction to follow through. Look at your goals like a lamp lighting the way – the brighter the light, the clearer the road ahead. If you don’t have clearly defined goals, you procrastinate. Think about your life and what you want to achieve, and what action you need to take to achieve the outcomes you want.
Measurable
Give yourself realistic deadlines. Adding specific dates, amounts, etc. makes your progress quantifiable to complete your goal and visualise a finish line.
Attainable
Be honest with yourself and set realistic goals. Decide what you want to accomplish. So, start with the goals that are highest on your priority list. It’s easy to be overwhelmed by everything that needs to be done, so start simple.
Relevant
Align your goals with the direction you want your life to take. Balancing the alignment between long term and short term will give you the focus you’ll need.
Time-bound
Having a finish line will mean you’ll get to celebrate when you accomplish your goal. Having set deadlines gives you a sense of urgency that is lacking when goals are open-ended.
Making additional investments
Do you have the means to make additional investments necessary to accumulate the required assets to achieve your goals? Don’t neglect to consider the effects of taxes on your savings and investments. After considering the foregoing, you might determine that you can achieve some goals in less time. Or you might find that it could take longer. The time horizon is important to setting realistic goals.
