Want to Fail Financially? Just don’t set Financial Goals
Goals need to be inspiring enough and real enough to motivate you to action.
The reality is that, without goals the things that you want, or, more importantly, that you need to have happen probably won’t. Very rarely does anything of financial importance happen accidently.
Goals need to be inspiring enough and real enough to motivate you to action. Without an emotional attachment to your goal, without a deep sense of what your life will be like when the goal is achieve, it is likely to wind up somewhere on a to-do list that finds itself buried underneath a stack of mail.
Keys to Setting Achievable Financial Goals
Decide what is important to you and why: It’s not enough to know what you want to achieve; more importantly you need to understand why it’s important. it is important to attach a value to your goals and prioritize them to ensure that you can at least achieve your most important goal.
Quantify your goals: If you don’t know how much your goals will actually cost, you won’t know if they are realistic or how much to save towards the goal.
Determine how much to save: Saving for a future goal involves many moving parts, including the dollar amount of your savings, the time horizon for your goal, the expected rate of return on your money, inflation, and the cost of the goal itself. All of these factors go into determining how much you need to save today.
Set your budget: One of the fundamental principles of successful savings is to pay yourself first, which means allocating the first piece of your paycheck to your savings.
Monitor and measure your progress: It is vital that you monitor your savings and measure your progress towards your goals so that you can make any necessary adjustments, either in the amount of your savings or the size and distance of your goal.