You may want to have many things or do many things. However, it is impossible to achieve all these things (at once). That’s why it’s helpful to set financial goals. By doing so, you will get a better idea about the most essential goals. This can be short-term (1 year) as well as a medium-term (2-5 years) and long-term (5+ years).
Financial goals can help you set priorities. These goals will help you make financial decisions in your daily life and use this money for the things that are important to you. This way, you will spend more time on your goals.
1) Write it Down
First, document your goals and group them by time frame: short-term goals (to be achieved within 5 years), medium-term goals (5-15 years from now), and long-term goals (more than 15 years into the future).
For example, if you have two children who you want to support to go to college, you can enter the two details separately. And don’t forget to include any debts you have to pay, such as mortgages or loans, in your list of financial priorities.
2) Prioritize Your Goals
Number your goals and prioritize them. This will depend partly on your personal priorities, but you also need to consider what makes sense from an economic perspective and what will provide the highest return on investment.
The following hierarchy makes sense in various situations:
- Debt repayment and emergency funds
- Retirement funds
- Savings for college
- Other short- and medium-term goals (as long as they are reasonable)
3) Act now
Ideally, you should act every day with momentum to get one step closer to achieving your goal. For example, if you want to get a new Rolls Royce, you can take a step forward by ordering a brochure or requesting a test drive. Keep trying to get closer to it because it is said that appetite comes with eating.
4) Don’t Make Your Goals Too Big and Don’t Lose Focus
You’re motivated, know what you want to save for, and are enthusiastic, so you often overestimate yourself. With your intentions formulated, you don’t think enough about how you will achieve them. You’re more likely to leave this for later. However, if your goal is too ambitious and too big, you will soon abandon it because it is unattainable and unrealistic.
Our advice is to keep your goals small. No one has ever completed a marathon in one go without training. So, what can you do today to reach your biggest long-term goals? Start by small steps until you finally achieve it.
5) Secure a Healthy Savings Account
Self-actualization is the highest form of self-fulfillment, and you can’t get anywhere without determining your current financial situation. It is the central starting point for your journey to achieving your financial goals.
Savings alone will not get anyone very far, but savings can do wonders if invested wisely.
6) Consult a Financial Advisor
Investing doesn’t come naturally to you, so it’s wise to consult a financial advisor. Talk to them about your financial and savings goals, and ask them to advise you on the best investment to help you achieve your goals.
7) Monitor Your Progress and Results
Your goals and action plans should not be written down and then put in a drawer or buried in a pile of papers. They need to be reviewed regularly to avoid getting caught up in old habits and the myriad emergencies in life. Review how things are going at the end of the day, the end of the week, and the end of the month.
How did you achiever your financial goals? Share your tips with us in the comments below!