How to Set Sound Financial Goals So You Can Realistically Achieve Them
Do you have a dream, like wanting to buy a house, sending your children to college, and having a comfortable life after you retire? Maybe you want to have $10,000 in your savings account, and no debt.
Or, maybe you want the big dream to be an independently wealthy individual and actually become a multi millionaire. Sounds like the typical American dream, right? Is it really just an idea in your head, or is it possible to make it a reality?
Financial dreams have been responsible for building many a large corporation from small beginnings. Yes, it is possible for most people if they set realistic financial goals. So how do you set realistic financial goals?
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Well, one way is to set a SMART goal for the amount of financial wealth you seek. In Goal Setting, SMART is an acronym that stands for:
S – Specific
You must set goals that support your dreams and are very specific. If you make goals, you don’t say “I’m going to send my son to a good college”, instead say “I’m going to save $$$$ (research the exact amount) so I can send my son to Harvard University”. Never forget to always make straight forward goals if you want them achieved.
M – Measurable
When you make goals, make them measurable so that you can better monitor your progress. it must contain a particular amount or quantity. Make goals like “I am going to increase my household income by $175 this month”.
Making measurable goals will set your mind to achieve that specific amount; and, as an effect make your goal easier to achieve. You create the plan and take the actions it will take to succeed and earn an extra $175 this month. This would be an example of a short term goal.
A – Attainable
What separates dreams from goals is that you set the goals that are attainable. Not every person is starting out at the same place or opportunity.
You make goals that you can achieve like “I can work 20 hours extra this month to make my extra $175.00”. Or, I can sell so I am starting a business today that will earn me $175.00 profit this month.
Don’t make goals that are almost impossible to attain; you’ll just get discouraged. Small goals seem insignificant sometimes; but they can show great results over time. Remember it is the journey and the pursuit that is important, and they can bring great joy into our lives.
R – Realistic
So, you must aim a little high, but not so high that you don’t believe you can achieve it. Make it a bit of a stretch. Most goals are never achieved because they are too much to handle resulting in failure. Or, they are set too low, sometimes resulting in a lack of motivation.
First of all, setting realistic goals means evaluating your own personal situation, and then set yourself up to make proper advances according to your own situation. No one else can properly set your goals for you. Don’t worry what others may think, this is your dream, not theirs.
You can start out by setting easy goals and slowly increase them, like “I’m going to earn an extra $5.00 every day for one week and then double it to earning $10.00 extra every day next week”. You might take the change out of your pocket every night and put it into the kitty.
This way, you would be able to easily adjust to the changes you make and achieve your goal. Small consistent changes that are realistic and positive bring about results that will motivate you to increase your efforts.
T – Time-bound
Set a time deadline for your goal to be achieved. Goals are sometimes not attained because the time you need to achieve it is not set or set properly.
You might set a goal like “Within a month, I will double my present salary.” For some this may be realistic but for some maybe not so much.
You may not be able to get it going this soon. Time constraint will allow you to measure what it will take each day to achieve your goal and determine how much effort you will have to exert to achieve your goal.
Set out how much you can effectively earn extra each day and multiply that over 30 days to find out what your new goal should be. Adding a bit extra over and above your initial figuring may give you extra incentive to really go for it.
That’s SMART Goal Setting in a nut shell.
Another factor you may need to consider on attaining your financial goal is discipline. Each goal that you create will require you to sacrifice certain things, such as time, budget, social life, and many more.
Here is where picking the right goal comes in. You must pick the right goal that will create the desire and give you the discipline to do what is necessary for you to achieve your goal.
Your goals are more likely to be achieved when they are positive and are what you truly want to do. Motivation is the key factor that keeps you going to attain your goal, instead of quitting after running into a few challenges.
If you combine all these factors in creating your first financial goal, then, soon enough, your dreams would become a reality. Small goals will lead you into larger goals and soon you will have your life dream of being independently wealthy.
So, what are you waiting for? Go for it!