Setting and actively chasing after goals is no easy task and financial goals are the hardest to reach and follow diligently. Academic goals, weight loss, professional fitness, and so many different goals come to mind when we consider the issue of setting and reaching objectives. But when it comes to finances, we develop cold feet. Perhaps because money may not be as easy to come by but, neither are other things.
Financial goals are not just our dreams and aspirations for our finances. We take calculated steps towards achieving a specific financial target within a set period. Therefore, your financial goals can be either short-term, midterm, or long-term. And the time frame depends on what you have in mind once you have reached your money goals, whether to buy a house, a car, etc. The ultimate goal for setting and reaching financial goals is to achieve financial security. This article will discuss five strategies you need to achieve monetary liberty.
5 ways to set and reach your financial goals
1. Be definite about your financial goals
Being definite about your money goals means having a clear mental picture of what you want to achieve and the timeframe within which you would have realized your goal. In other words, you need an idea and a time frame, without which will be wishful thinking. Often, most personal finance enthusiasts advise you to write down your goals. The reason is that it gives you a certain sense of direction. However, it would be best to approach writing your money goals systematically to make more impact. Essentially, you should write your money goals with a mindset to achieve more clarity of your objective.
2. Your financial goal should be realistic
A realistic money goal takes your sources of income into account, whether active or passive income. It is unreasonable to set money goals using the money you are unsure of such as winning a lottery or gambling.
3. Specificity is critical for your financial goals
Specificity is vital when setting and reaching money goals because it gives you direction and sharpens your focus. And, also helps you stay disciplined towards your monetary goals. For instance, having in mind that your goal is to become rich is not specific enough. However, if your goal is to buy a house, a luxury car, or offset your debt, you are detailed enough.
4. Your financial goals should be time-bound
Because time is money and the unit of measure for events, your financial goals must be time-bound. By this, we mean that you must have a measurable time frame within which you will achieve your goals. There are no rules to this, as there are a couple of ways to set and measure the time for completing your money goals. It is somewhat like setting a deadline for yourself and trying to meet it. Some people bind their financial targets to their ages, like having a set amount of money to buy their next birthdays. Others bind theirs to the passing months and years, like clearing all debts within the next three months, etc.; there are no rules as to how you choose to go about setting and meeting up with your target. It is essential to set time limits that you are comfortable with, which are realistic for you, considering your earning capacity.
5. Track your progress with your monetary goals
Failing to track or monitor an outcome closely means setting it up for failure. It is like cooking without watching out for when the food gets cooked, so it doesn’t get burned. We can say the same for your money targets. It is essential to constantly check in with yourself to see how far you have gone and how close you are to achieving your goals.
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FAQS: How do you achieve financial goals?
How do you achieve financial goals?
Financial goals are intentional targets we set for our money within a specified timeframe. The first step is to be definite about your plans. Being concrete about your goals means that your goals are realistic, specific, and time-bound. Additionally, you must monitor or track your progress to reach your money goals.
What are some examples of financial goals?
There are as many money targets as there are things to do with money. Both individuals and corporate entities have and set money goals. Examples of general monetary goals include but are not limited to Paying off all debt(credit cards and loans), revenue for a quota, saving for retirement, investing in a business or venture, embarking on research, going on vacation. There are as many goals as there are as many things we can achieve with money.
What types of monetary goals are there?
Generally, financial goals fall into short-term, midterm, or long-term goals. Short-term goals are usually less than three years, midterm goals typically are between 3 to 10 years, and long-term goals are generally above ten years. There might be other types of money goals, but the underlying factor is the estimated duration.