It’s no secret that setting and achieving financial goals can be complicated and overwhelming, it is one of the main reasons why so few of us actually take the time to set and achieve them. This is a mistake! Because without financial goals, it’s impossible to save money effectively or progress toward achieving our goals.
So many people set New Year’s resolutions to save money and get their finances in order, only to find themselves in the same situation a few months later. We have all been there. But it doesn’t have to be that way! If you approach goal setting with a clear and defined process, you’ll be much more likely to achieve the financial success you’re looking for.
In this blog post, I’ll show you how to achieve your financial goals in 6 simple steps that work for you. We’ll cover everything from figuring out what you want to achieve to setting realistic targets and timelines. By the end of this post, you’ll have everything that you need to make your money work for you.
Why Setting Financial Goals is Important
If you’re like most people, when it comes to your finances, you probably have a few goals in mind. Perhaps you want to save up for a down payment on a house or pay off your student loans or maybe you’re aiming to build up your emergency fund or retirement nest egg.
Whatever your goals may be, setting the scene for them is very important as it gives you something to be accountable for, which in turn establishes responsibility. And you will be more likely to succeed in achieving them. I know you may be wondering what’s the best way to go about setting financial goals. I’ll tell you about that a bit later.
What I want you to understand is that without setting goals it’s like going on a road trip without a destination in mind, we’re just aimlessly driving around more likely to spend money on fuel we wouldn’t need if we had a plan. So that’s how important setting financial goal is, if you don’t have them in place you are probably planning to fail.
My advice is to start with small goals to get you up and running, think about it like you are in gear one and you are slowly building momentum. The key is to be consistent. So take a small financial goal that you have and run it through the 6 simple steps below and watch as the momentum builds.
How to set and Achieve Your Financial Goals
Here are the 6 Simple Steps to Effective Financial Goal Setting
Step One: Define Your Goal
The first step in effective goal setting is to know what you want to achieve. This might seem like an obvious point, but it’s so important to take the time to really think about what is it that you really want out of life and what role will money play in helping you get what you want. Do you want to save for a rainy day fund, retirement or for a specific purchase? Be as specific as possible so you can create a plan to achieve it.
Set a timeframe for your goal. How long do you have to save? This will help determine how much you need to set aside each month to reach your goal. Work out what’s important to you about getting what you want. How will you feel when you get what you want? You can use the SMART Goal strategy to help you define your goal. Once you’ve put everything on the table for a thorough inspection, you will have a very clear understanding of what your end goal will look like, then you can start thinking about the next step.
Step Two: Set a Realistic Target
Make sure your goals are realistic if you want to be successful in achieving them. That means taking into account things like your current income, debts, and expenses when setting targets for yourself. Otherwise, you may find yourself feeling overwhelmed or discouraged if your aims are unrealistic given your current circumstances.
Once you know what your goal is, come up with a timeline and the dollar amount that really fits your lifestyle and income. Automate your savings. The best way to reach your financial goals is by setting aside money automatically each month through payroll deductions or automatic transfers from your checking account into savings or investment accounts. Invest for the long term. When it comes to investing, time is one of your greatest allies.
By staying invested, you’ll reap the rewards and be well on your way to achieving your financial objectives. Review and adjust as needed. As life happens – marriages, kids, job changes – take stock of your goals and make sure they still make sense given everything else that’s going on in your world. Regular check-ins will help ensure your target is still realistic and keep you on track
Step Three: Create a Timeline
Then create a timeline. Determine when you will start and end your savings plan. This will help keep you on track and motivated. Set aside money each month. Decide how much of your income you will save each month to reach your goal. This may require some sacrifice, but it is important to stick to your plan. When creating your timeline keep in mind that money changes over time, I use a great formula when making financial decisions and I call it The God Formula of Finances, you might know it as the Time Value of Money. The God Formula of Money consists of:
- Present value (What is happening now),
- Future Value (The end goal),
- Payment (How money changes hands),
- Period (How long it will take),
- Interest Rate and Return on investment (How money changes over time)
Step Four: Take Action
After working through the step above, you now have a robust plan on how to achieve your financial goals, your next step is to take action. To take action you need to eliminate all excuses, all the buts and all the can’t. The only thing standing between you and your goal is yourself. There will always be reasons for you not to take action and you need to overcome that.
For example, you are on your way to saving for that dream vacation, then an ad comes up on TV about this amazing new gadget that you do not need but want to have. This is the kind of excuse I’m talking about. To achieve your goal you have to give up the excuses because taking action requires great dedication and will keep you accountable. Every time you took an action to stick to your plan, praise and congratulate yourself for your effort, this will motivate you to take the next step toward your goal.
Step Five: Be Flexible in Your Behaviour
To achieve your financial goal, you need to be flexible in your behavior. What I mean by that is having the capacity to take the information you have gathered about your goal and assess what is working and what is not working. Having the capacity to change what’s not working and to improve what is working by making adjustments that will bring you closer to your goal.
Successful people are very aware of the importance of being flexible and they always use it to make changes to their plan while staying focused on the end result. This doesn’t mean that you need to change your goal, it just means that you need to take a different direction to achieve your goal.
Step Six: Have the right Mindset and Monitor Your Progress
This is a very important step in achieving your financial goal. Monitoring your progress will let you know whether you are on track or whether you might need to use other resources to move you forward. Make sure you are hitting your milestones, if not take the time to re-evaluate.
Look at whether you need a new skill set, you might need to work on your mindset or clear some money blocks, and a Financial Coach can help you with that. If it seems like you are not making progress, don’t be discouraged, you might need to tweak your mindset a little to keep you moving forward.
Remember failure is growth, don’t be afraid to fail because failure is actually giving your feedback on what extra help you might need. You are not going to get everything right the first time you try, you are going to make mistakes, and that’s ok! Just keep your end goal in focus and you will be successful.
Takeaway : How to Stay on Track with your Financial goals
Praise and celebrate every time you achieve a milestone, this will help keep you on track with your financial goals. Setting up a financial goal takes time, dedication, and careful planning. But it is within reach for everyone who is willing to put in the work. If you follow the 6 steps outlined above, you will achieve your financial goal and so much more.
I can’t wait to hear about the amazing goals you will be setting this year, and make sure to let me know about everything you accomplish! It will be an honor to celebrate your achievement with you and if you need a little encouragement to keep you on track, give me a buzz, I’ll be happy to guide you and keep you accountable to take action towards your financial goals.
