Are You Ready to Set Personal Finance Goals?
How many times in your life have you been asked to set goals? We are often asked to set objectives in our work environments and may even set our own personal health goals. Regardless of the goal, the process is often well-thought out and carried out through a precise strategy. The same scenario can take place when setting financial goals. The same as it is when you are setting a work or health related goal, it is important that your financial goals reflect your lifestyle and abilities. When setting financial goals, keep in mind that they should be crafted specifically for your needs.
If you are just starting out on your own, financially, you are probably not going to set a goal to save $100,000 by the end of the year, right? Right, because you are realistic and know that that potential is way out of reach. You know your own spending and finance habits, which is why you are the best person to be setting such goals. Some people choose to seek the help of a financial advisor when setting their goals. However, the process can be easily completed from the comfort of your own home. The Wall Street Journal recommends utilizing the Life Values Quiz tool when setting financial based objectives. This quiz allows you to better comprehend your own spending habits and lifestyle choices. It is often used by newlyweds to allow them to understand one another’s financial standings. Along with being realistic is the need to be prepared when setting goals. Most financial experts will advise individuals to keep a savings account “for a rainy day”. Unexpected spending endeavors or emergencies happen all the time, so being prepared is best practice.
Long and Short Term
Goals are set in two different buckets, long and short term. When setting financial objectives it is important that both the near and distant future is considered. For example, a couple may set a few financial goals to get them through the rest of 2017 but this couple may plan to have a child in the next year or so. Keeping in mind any life changes or events that would impact your finances is always important to keep in mind. Finance professionals often believe that 90-day ambitions are a good foundation for those new to financial independence. When working with short term goals, organizing them in order of importance should come into play. Hoping that all will be achieved, life can often throw curveballs, making us choose between two scenarios.
Setting financial goals is something that many people neglect to do, largely due to the fact that they are unaware where to begin. Investing time in a professional’s help can help alleviate stress but you know yourself and your spending habits better than anyone. Whether using an online tool or a simple excel spreadsheet, you have the power to control your financial future by creating goals and achieving them!