Goal Setting Fundamentals
Setting goals is a fundamental key to lifelong success in general, and it is just as important as you seek financial success. Here are some things to consider as you set and achieve financial goals:
Consider Your Values
Imagine you've just inherited $1 million. Write down what you would do with that money. This should indicate to you what your financial values are. Some might find it helpful to create a list of the things that matter most in their life, such as spouse, family, church, career, education, financial stability, work, health, recreation, etc. Once you brainstorm and create the list, be sure to assign a numerical value (between 1-10, with 10 being the most important) to each item. The three list items that hold the highest numerical value should be your key priorities. The rest are still important, but they generally come as subcategories of those key priorities. After that, make the goals more specific to your situation and modify them to include where, when, and how you plan to achieve those goals.
Always remember this acronym when identifying and formulating financial goals:
- Specific – Make sure you know exactly which area needs improvement. Don't be too broad, or you might feel like you're biting off more than you can chew with this goal, which can actually discourage you from achieving it.
- Measurable – Don't set a goal for which you can't measure progress. If you can measure progress, then you will be accountable to yourself to fulfill this goal, and you will feel a sense of achievement as you measure the success.
- Assignable – If there are other people whose help you need to complete this goal, then specify who they are and what they will do. Otherwise, make a list of everything you need to do to achieve the goal.
- Realistic – Don't overestimate your resources, including the time available to you, to complete this goal. Being realistic will allow you to feel more optimistic about the achievement of the goal and will actually facilitate its completion.
- Time-related – Put a deadline on it! Make sure you are being realistic, once more. This will help you know when and where to measure success checkpoints, and it will prevent potential discouragement.