How to Set Financial Goals You Can Achieve

Of all your personal financial goals, the ultimate is most likely to become financially independent. Getting there requires short-term financial goals that you can achieve. The most important financial goal you can achieve today is to implement a financial plan that will put you on the road to freedom from debt and a secure retirement.

Difficulty:

Easy

Instructions

1. Determine your most immediate need. It may be paying the bills on time to avoid late charges, having enough cash on hand to buy groceries or gas for your car without charging, paying down debt or beginning your retirement savings. This is your first short-term financial goal.

2. Decide the amount of money that you will need, and set a time frame in which you will meet this goal. If paying down a your debt is most important to you, set a specific amount that you will pay down in the set time period. For instance, you may decide that you want to pay down 5 percent of your credit card debt over the next 12 months. If you need to start paying the bills on time to avoid late charges, don't give yourself 12 months. Decide that you will be there, if at all possible, within three or four months. The purpose is to set reasonable goals, not to expect to be debt free and independently wealthy in a short period of time.

3. Evaluate your current finances and find ways to adjust your spending. Find the money you're wasting or that you're spending on things you can do without, at least for a period of time. Commit yourself to making those changes and using that found money to help you reach your goal. Learning how to manage your money wisely is one of the most important aspects of a personal financial plan.

4. Make every effort to increase your income by at least the amount you are still short. Use your skill set and create extra income if you have to. Even if it means working outside of your profession, going back to work or working from home.

5. Setting financial goals you can attain will help you stay motivated and on track with your financial plan. Once you have reached your first goal, then it is time to re-evaluate your finances and set new goals.

References

• daveramsey.com: Home