Setting Financial Goals – It’s Kick Off Time!

You may be tired of the “goal” talk when it comes to your financial plannning.  But the truth is, setting financial goals can keep us motivated.  Why do you think we make up New Years resolutions? Resolutions tend to give us a kick start to the year, help us focus on what we wish to accomplish and give us something to look forward to. 

This is the same when setting resolutions for our finances.  Actually it is imperative that we set goals and make plans with how we intend to spend our money.  If not, we will spend money on anything that strikes our fancy and, before we know it, we will be deeper in debt and/or unable to financially do the things we wanted to do.

When it comes to financial goal setting, let’s keep it simple:

1. Determine your financial goals. Don’t overload yourself with them.  Pick about two or three goals and get going. Some examples may be you want to start putting money into a savings account or a Christmas Club account; you want to set aside money for car repair and maintenance in a cash envelope; or maybe you want to take a vacation this summer.  Pick something you want to do and make it something obtainable.  If you know you can't afford to go to Europe this year, don't make it your goal for this year.  But if you think you can go in two years, make it a two year goal.  Simply put, be realistic.

2. Decide on a "plan of action" to meet these goals.  Be specific and determine the amount of money you will need to meet your goals and by what date you will need that money.  How much can you set aside each paycheck or each month?  Can you make adjustments to your budget in other areas like entertaining and eating out?  Will you need to increase the use of coupons?  As a side note, if you have had an increase in income (either by paycheck or Christmas gifts), now is a good time to decide how to "spend" that money.  Otherwise, it will be absorbed into the budget and three months from now you will wonder where that money went.

3. Put the “plan of action” into action.  No plan is going to work if we don’t get started. Decide which paycheck to begin making the changes and do it!  If one of your goals is to get out of debt, it won't happen if you don't apply your plan of action.  If you want to go on vacation, get ready for it now, not in June.  Start setting aside the money you have decided on and go for it!

Setting your financial goals is exciting.  Following through on them and seeing them happen is success.  Small steps can lead to bigger financial gains.  As you see your finances grow in one area, you become encouraged to have your money grow in other areas.  Stay focused, make a plan and you will succeed!