Setting financial goals for your future will make you that much more likely to achieve them. According to recent studies, a staggering 95% of millennials are saving less than they should be for retirement. This indicates a lack of attention to financial planning that could leave millions in dire straights in the future. It’s more important now than ever to start setting financial goals for your future.
But setting financial goals goes far beyond budgeting and financial planning. It involves setting long-term goals and a plan to reach them. Keep reading to learn why financial goals are important and how to set yourself up for success.
What is a Financial Goal?
First, let’s look at what a financial goal is. A financial goal is essentially the target you set that puts you in motion to create the lifestyle you want. Look at what your priorities are and list them in order.
Maybe you want to travel the world. Maybe you want to be a homeowner. Or maybe you just want enough money in the bank to cover the cost of your car payments each month.
Consider all the things that you count as important for your life. Those are your financial goals. None of these things will come for free.
Why Do You Need Financial Goals?
Setting financial goals is important for several reasons. Goals are motivating and inspirational, but they also serve a few other purposes as well. Let’s take a look at what some of those reasons may be.
To Know Where You’re Heading
Financial goals help you figure out where you’re going. If you don’t have a concrete plan in place for your money, you risk spending it unwisely. You could even run the risk of wasting money completely.
If you want to have peace of mind that your money is going to places that will benefit you not only today but in the future, you need to set concrete financial goals.
You don’t get behind the wheel of a car with no destination in mind and expect to wind up where you needed to be. The same can be said for financial planning.
To Know How Much to Save
Setting financial goals will help you prioritize what you spend your money on. You’ll understand what you need to save and when you need to save it.
Having each goal laid out also allows you to put money aside for each thing you want to do. Maybe you want to travel the world and save for a home. Having these goals in front of you could inspire you to save a little at a time until you’re ready.
To Shape Money Making Choices
If you’ve written down your financial goals and found that you don’t make enough income to cover them all, it may be time for you to start moving up the career ladder. But unless you figure out what your goals are, you may be stuck working a job that won’t ever support the lifestyle you want.
We’re lucky to be able to turn just about anything into a money-making opportunity. But unless you’re aware of the areas in which you need to grow, you can’t expect yourself to start growing!
To Stay Focused
When you’re in the thick of the workweek, no matter how much you love your job, every step can feel like you’re just plodding along. Many folks count their days until retirement, never pausing to consider all the opportunities they missed because they didn’t start financial planning earlier.
You need strong goals to keep yourself focused. It’s easy to lose sight of your motivation to keep going to work, to keep finding new and innovative ways to bring money in, when you don’t have goals to keep looking towards.
To Create Realistic Plans
Lastly, financial goals allow you to understand the things you can realistically accomplish. Not everyone has the means to travel the world, buy a house, and pay off their car. But you know where you start when you start setting goals.
Maybe you can set the goal of traveling to Mexico as a long-term goal while maintaining buying a home as a mid-term goal and paying off your car as a short-term goal.
SMART Financial Planning
So, how do you set financial goals? You have to be SMART about it. SMART stands for specific, measurable, achievable, relevant, and time-bound.
To set specific goals, you have to know:
What you want to accomplish
Why it’s important
Who is involved
Where it’s located
Which resources and limits are involved
Maybe your goal starts out as “I want to travel to Mexico and visit the beach because I’ve always wanted to experience the culture.”
Next, it has to be measurable. A good way to make this goal measurable is to add a specific dollar amount to save. Now, we’ve got “I want to save $1000 to travel to Mexico and visit the beach because I’ve always wanted to experience the culture.”
Making your goal achievable and relevant is more personal. Only you know what is truly achievable. Ask yourself if you can realistically budget for this goal before proceeding.
Lastly, you have to make your goal time-bound. Set a solid date and stick to it.
A SMART financial goal could sound like “I want to save $1000 by March 30th, 2023 so I can travel to Mexico and visit the beach because I’ve always wanted to experience the culture.”
Financial Planning for Your Future
Whether you’re trying to pay off your mortgage or travel the world, you need financial planning to help you get there. Setting smart goals will help motivate you and keep you on track so you can do everything in life that you want to. Financial planning will help prepare you for retirement, as well.
Financial goals can also help you achieve your lifelong dream of buying a home. If you’re looking to get approved for a mortgage, your looking for a HELOC or home equity loan to consolidate debts, contact us today.
For a free consultation call us at 1-877-383-1577 or simply apply online and let us get the ball rolling!
