Basics of financial planning and setting financial goals! Most people often face problem in managing their money in relation to how to make it. It may be your habit of overspending, taking too much credit and involving in a variety of loans or it may be your bad luck but it feels really shocking when someone with good financial history descends into poverty and indeed into bankruptcy.
There are plenty of reasons that effects our personal finances, these are some of the interesting things which may come in your life that may require a great effort of money management financial to deal with. Sometimes it may be in our control but our impulsive behaviour may not help us getting out of it and sometimes it may be our bad luck that may ask us to pay the price, in all its way you have to pay the price.
1: According to Statistics Canada’s latest reports 50% of married people go for a separation every year. In its latest finding, nearly 70,000 were divorced where nearly 150,000 Canadians marrying every year. Among married couples, money management problems are the leading cause of separation and divorce.
2: As we know superstars including celebrities and top athletes have to maintain their image in the public and for that reason, they have to spend more. Although these people make millions sometimes their heavy spending habits may lose them all.
3: There are plenty of people who don’t care about planning and rush themselves in getting things on loan and getting more than one credit cards without thinking about it, these people are not fulfilling their dreams but ruining their real financial life while increasing their liabilities and threat being caught in the debt problems.
You will find plenty of money management strategies but I personally believe in saving rather than making more from it because, in reality, a dollar saved is more than a dollar earned, since I have already paid taxes on the dollar I have already earned; “A dollar saved is a dollar earned”.
Setting Up Your Financial Goal
Setting financial goals is a smart choice! Setting a financial goal is same as setting a personal goal for yourself. For example, if you decide to become a doctor, you develop an action plan that will get you there. Whereas when you set a financial goal, you define what you need and develop a plan for achieving it. You have a definite aim and a clear path for getting there is a certain amount of time.
How to set financial goals is crucial but rewarding! Goals like “get out of debt” and or “become a millionaires” are very common among us that required your persistence approach and hard effort to accomplish. In order to achieve your financial goal a little discipline on your side is required, which may create a balance between your goals and enjoyment while ensuring your future financial security. Here’s how you can set your financial goals to achieve that will definitely require some changes in your lifestyle as you set these goals.
Short-term financial goals should consist of the things that require your immediate personal attention to carry on life, building relationships and making a foundation to carry on the best hope entering into a successful future. It should not consist of high expenses and pressure on your budget because you will be spending it from your current income or very limited savings that you may set and achieve within one month to one year. Examples of short term financial goals may include purchasing a kitchen utility, gardening utility, parking lot, family vacation, birthday and holiday gifts beside you may also pay off your credit cards or other utility bills.
Mid-term financial goals are goals that you have set and want to achieve within one to five years. You have the savings and you can easily manage your expenses by getting all those things to improve your lifestyle. Mid-term financial goals are best for purchasing a new car, repairing and remodelling your home besides paying off all your credit cards too.
Long-term financial goals are goals that may require a big investment that will take five years and longer to achieve, and it will accomplish indeed with your long-term savings. Examples of long-term goals may include purchasing a house, mortgage, retirement savings, college education funds and etc.
Dividing your financial goals into the above three-time phases will definitely help you in achieving success with your personal finances. Short term financial goals may help you a lot in developing confidence and smoothly adapting and setting up other midterm and long term financial goals because these short term financial planning require a very small budget although it also comes from your savings in just a fraction of the risk you will get chance to study and correct your mistakes and problems.
Believe me, the process of financial goal setting is quite simple and easy to do it’s a job. All it needs is you to adopt the way you can do it easily and then follow accordingly. Here are 6 key steps in financial goal setting that will definitely help you in setting goals for success:
6 Steps To Reaching Your Financial Goals:
- Set and write down while dividing all these into short-term, mid-term and long-term financial goals.
- Make a goal setting worksheet; set and write down the dates to start working on your financial goals and a time frame to achieve these financial goals.
- Create a detailed, realistic, specific, measurable and achievable action plan because documented goals are easier to track and assessment.
- Be flexible because sometimes it requires necessary adjustments to your goals and strategies.
- Periodically review your financial goals and evaluate progress, you can better manage it if you measure it prompt, that’s why set a reasonable period to review as monthly, quarterly or whatever you may think better in your case. Remember, minimum will be the assessment period minimum will be the damage that also takes little time to handle the problem.
- Increase your financial knowledge. Take the services of a financial consultant or ask your friends who can guide you on personal investment options. Read books, articles and other financial stuff to enhance and update your knowledge.
Remember if you will be not spending wisely these financial goal setting and planning will not help you that’s why to try to control your self when especially buying on impulse. This may be an excellent tip if you put such merchandise or stuff on a waiting list for a month and between that check other alternatives to compare prices and other features of interest it holds before purchasing one for you. This way you will get two possibilities to go with, either you may have it at a reduced rate or you may also say no to the product because it may be possible you don’t actually need to buy it.