It’s amazing that we are already at the third article of our Mastering Personal Finances mini-series! If you have just joined us, take some time to read through our previous issues about assessing your financial health and setting up your budget.
Now, let’s move on to this Mastering Personal Finances post’s topic – how to establish financial goals.
As with just about anything in life, setting goals is important, and the same applies to your personal finances. Everyone’s goals will be different, based on a number of factors such as lifestyle, current income, retirement goals, children, etc.
The financial strategy to meet your goals
One sound tip for goal-setting is to stick to the S.M.A.R.T. method. Make sure your goals are Specific, Measurable, Attainable, Realistic, and Time-sensitive.
Another key technique is to focus on short-term and long-term goals.
Let’s start by looking at long-term financial goals, which are usually planned for a 10-year period or longer. Your most important long-term goal is your retirement plan. It was estimated that a whopping 40% of people under 50 have done no preparation for retirement. Take a moment and use the Retirement Calculator to determine how much you should put away for your retirement years.
After you are done, you will have a better idea about how much money you need to be able to retire. Another thing that could help is to make an appointment with your financial advisor. Small steps are good – they will set you up for success in the future.
How to set up short-term financial goals and why
Making short-term financial goals is also important to your personal finances. These goals are usually planned for a period of at least 6 months and up to 3 years. It’s things like paying off any credit card debt you have, beginning a savings plan for your child, or refinancing your mortgage. When you set these goals, keep in mind that you need to be patient if you want to reach them.
To get you started on a way to establishing your financial goals, take a look at this week’s activities for success:
- Share your personal finance resolution.
- Complete the Retirement Calculator.
- Set two financial goals: a short-term goal and a long-term goal.
Also, be sure to tell us about your experiences with managing finances so far. Have our articles been helpful to you? Or do you need more help? Use our comments section to share your opinion and look forward to our next post where we will be talking about getting out of debt.
Still looking for more? Feel free to check out our comprehensive personal finance guide to learn more about managing your budget and staying financially healthy.
[Featured image: marekuliasz / Shutterstock]