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#Seth - Says,

What are your financial goals? Chances are you don't know. Even those who think that they do know seem not to be focused enough when it comes to achieving them.

The process of setting financial goals is not overly difficult, but it does mean you have to sit down and form a plan - something that is tiresome for a lot of people. The act of putting down the goals on paper, however, will go a long way to helping meet your personal financial dreams.

Achieving financial goals requires a combination of dedication, perseverance, and most important, knowing where you want to go. Here are the steps you need to take to achieve your financial goals:

Identify Your Goals: Have you taken the time to sit down and come up with a list of your financial goals? Many people wonder why they can never reach their financial goals when they have never taken the time to even understand what those goals are. The first step is to take the time to identify your goals.

Many people also have "financial notions" which they think to be the goals, but they aren’t in reality. Financial notions are ideas that are kind of fuzzy in your mind about money and personal finance, but which have never been considered thoughtfully or in detail. Financial notions aren't concrete enough to be goals that can be achieved most of the time.

Focus The Goals: Once you have written down your financial goals, you're ready to go to the next step. While some people manage to write down their goals, the act of writing them down isn't enough to help you achieve them. Your financial goals need to be focused.

Look at your list of financial goals. It may look something like this:

Send the kids to college
Buy a new car
Save for a down payment on a house
Take a vacation
Paying off credit card debt
Begin planning for retirement

The problem with these goals is that they're all too broad. When goals are written down in broad terms, it's much more difficult to achieve them. In step two, you need to focus each of the goals as much as possible. One good way to accomplish this is to put a date on the goal.

For example, "Paying off credit card debt" can be focused as "I want to pay off all my credit card debt by December 2007" or "I want to pay off credit card x within three months."

"Save for a down payment on a house" can be focused by giving it both a dollar amount and time frame. "I want to have $20,000 saved for a house down payment by December 2007" makes it much more focused.

Many times when goals are listed in broad terms, people fail to identify the specifics that are parts of the goal. "Buy a new car" may really mean "I want to buy a new car without taking out a loan" or it could mean "I want to buy a new car with only a $2000 loan." It depends on the person and that's why it's important to get the specifics of exactly what you want to be able to achieve the goal.

Write A Goal Plan: Most financial experts now say that you should break the goals into short, medium and long term time frames with short being less than a year, medium being 1 to 3 year and long being more than 3 years. While this is a good start, it again fails to list the specifics needed to make the goals a reality.

In the previous step you have already made a time frame for when you want to accomplish the goal. What you now need to do is lay out a plan on how you're going to achieve the goal. It's much like wanting to get someplace clear across the country. If you start heading in the general direction, there is a chance that you'll eventually reach where you want to go, but if you have a map of how to get there, you're much more likely to get there and in a lot less time. The more detailed the map, the better the chance of reaching your destination in the least amount of time.

In the same way, the more focused and detailed you can be in creating a plan to reach your financial goal, the better the chance that you will be able to achieve the goal in the least amount of time. This is because the more detailed you can be, the more you know exactly what your financial goal is and the steps you need to achieve it.

It will take some time to write out a plan for each of your financial goal, but the process of writing the plan for each will help you focus the goal. In fact, your goal may change a bit as you begin to lay out a plan on how to achieve it which is perfectly acceptable.

Focus The Goal Plan: Just as you focused the goal in the second step by giving it a date on when you wanted it achieved, you need to focus your plan to achieve the goal. That means assigning each of the steps in the plan a time period by which you want to achieve it. For short term goals (under a year), you should set up steps to achieve on a weekly basis while medium and long term goals should have steps set up to achieve on a monthly basis. By giving each of the steps in your plan to reach your financial goal a time frame, you're much more likely to achieve the financial goals.

Highlight The Goals Now that you have financial goals that are specific and have a plan to achieve them, it's time to put the goals at the front and center. Many people spend time writing their financial goals and then put them in a folder which they don't look at again for another year when they decide to write their financial goals again. To make sure that your financial goals are not forgotten, take your list and place it someplace that you will see it every single day, preferably a number of times each day. Tape it to your computer, put it on a bulletin board above your desk, slap it on the refrigerator - any place that you are going to see it each and every day to remind you to keep working in the direction of your financial goals.

Review Your Goals: As you begin putting the steps to your goal plans into action, be sure to review them on a regular basis. Short term goals of less than a year should be reviewed on a weekly basis while longer financial goals on a monthly basis and make suitable changes where and when necessary. New issues arise and circumstances change. Be flexible, but keep heading in the direction you want to go to achieve the financial goal.

Tell Everyone You Know: While I left this step for last, it's actually one that you should be doing from day one and throughout the entire time you are moving toward your financial goals. Tell every one and anyone what your financial goals are.

It's much easier to slack off on your goals if you're the only one who knows what they are. If you get lazy, you're the only one that knows and nobody will be there to ask you "what about that goal you set?" If you tell a lot of people, then there is more pressure for you to keep going. All the better if the people will hold you up to your goals - we all need this from time to time.

Money and financial matters can be a touchy subject for some people, so if you don't want to tell anyone that is close to you, at the very least begin a journal detailing your financial goals and progress toward them. Often times it's taking the step to let others know that puts the true commitment behind you actively progressing toward your financial goals.

Last edited by Seth on Mon Dec 31, 2007 10:35 am

#peter - Says,

Seth, you have raised very important points. Really, to know about the financial goals is essential so that planning future expenditures is as per a specific plan and achieved within set timeframe.


#sdchargers_63 - Says,

Yep..i would say that sums it up!! being a single mom can be a bit overwhelming...emotionally and financially. I try to take things 'one step at a time', 'one day at a time'. This forum really has helped me focus on ALOT of things. Really good advice, Seth!!!!
#smilenyc07 - Says,

This is a very interesting article, Seth. I want to stress the point with the record keeping, to me this is a very, very important part. Keeping records of what you owe, what you have paid etc hepls understanding one's financial situation best. I have created an Excel table for myself where i post everything that I spend, everything that I owe and everything that I have to pay... helps a lot Very Happy There are also some good softwares to use for that, like Microsoft Money and my new favourite: Mint (

Kudos to you for the post, Seth Very Happy

#sdchargers_63 - Says,

I'm in the military ( as some of you know) and I have a 'percentage' of my military paychecks going into a 'IRA' sort-of -thing. the future, if I need to, I can 'barrow' on my money.....and pay 5% back to them. I think it's a great way to save for whatever I need.
#Laura - Says,

Keeping track of finance is very important. Money is hrd earned and we cannot let it go haywire. Even I use the excel format to keep track of all that I spend. Stremlined all my plaannings and now I guess things will work fine.
#smilenyc07 - Says,

Yes, before I started keeping records I constantly had problems. I would spend money from my cards on something, than I would forget that I bought and charge something else which would result in fees and a bunch of other problems. Documenting everything made my life easier!
#goodnatured - Says,

I keep it all written down in a note book, had to get more organized, I have folders that have my goals in them.

I have to say this has helped me, one of my goals was to pay off all old debt, I had 3 credit cards and an old cell phone bill. I am down to one credit card to pay off. I started a file that is now my "Paid In Full" file, which I am very proud to say is getting bigger. It has been a long road. I am getting there slowly but surely.

#debtstinker - Says,

you guys are very disciplined, i find that when i write down things it's hard for me to see my mistakes on paper so it's easier to avoid them. i think i fall in that category seth pointed out about thinking we know what we want but aren't focused enough. i don't know if any of you are like this but when i have the least amount of $$ in the bank i want to SPEND SPEND SPEND!! it's like if you don't have it you want it, human nature i think. i'm trying to become more disciplined by doing smaller things like not eating out, haven't seen a movie out in years, haven't rented one in 6 months. and i don't really miss these things either. our son takes up most of our time and he has disciplined me more than he'll ever know. he's our first baby and sometimes it's hard to put him first before ourselves but we do it. we wanted him and now it's our obligation to give him everything he needs. all he wants is our love and we have plenty of that.
our goal right now is to buy a home and we're taking measures to do so without being so strict on ourselves that we're miserable. thankfully we're able to do that, it'll be a long while before our credit is back up and we have a down payment, but at least we have something to look forward too

#goodnatured - Says,

It takes a while to get into the habit of writing things down and just because I write them down doesn't mean that I follow my own rules sometimes, all that does it put it right in my face and once I can see it, I know what I have to do. Usually I am pretty good about getting most of the things on my list accomplished.

I usually have to do two list, one is a must like the utilities and then their is the other, the ones that have to be done but I can afford to dicker with. Like the grocery list, I will buy bulk when it is on sale or I have coupons. Thats how I end up with toooo much tomato soup, those stinken coupons. Family gets a little tired of it, but just because it is there does not mean you have to eat it every night, it will be there when your ready for it and you won't have to pay as much. Just kidding on the tomato soup, usually it is items that I use all the time, like coffee, one week it will be $9 a can and on sale it is $4.99, of course that is a big savings to buy a few cans at that price, so I stock up.

#debtstinker - Says,

Buying in bulk is an EXCELLENT way to save money actually. it's hard shelling out the money for all that merchandise but a month or two later when you normally would run out of something you'll have it on hand. you're right, when they're hungry for tomato soup they'll eat it, until then canned food has a wonderful shelf life!
I'm glad that writing a list helps you, still working on this Smile Smile sheepish grin

#goodnatured - Says,

I am working on a promotional deal through the local grocery store and kraft foods, just got another great coupon tonite. $2 off next grocery order, these are awesome because I am only purchasing the items that are on sale anyway. Feels great to cut the grocery bill in half sometimes.

Making the list is another way that I keep track of what is on sale and what I have coupons on. Right now the local store has the huge Hershey bars for one dollar, these make excellent christmas gifts, just about everyone loves chocolate, so I wll be picking about twenty of them up and stashing them in the freezer for christmas and with my $2 off, I will get two of them for free, LOL.

#debtstinker - Says,

well good, i'd say you certainly have those goals, especially with the holidays coming up. I had to cash out my 403b account a while ago. one of my financial goals is to get an account (hopefully a job soon) and leave it alone and let it accumulate! thankfully my former account didn't have much in it and i'm glad i participated as that $$ came in very handy recently. my taxes will be minimal come tax time. it's so easy to think hey i'm young (28 soon to be a year older) retirement is far awya, but it isn't! I read somewhere to pay yourself first before your kids' college fund. there will always be help (hopefully) for kids going to college, there won't always be a time to fund your retirement. very interesting concept!
#debtstinker - Says,

Gotta ? that I think is appropriate for this forum and it's going to sound hypocritical given my former post, but does anyone know of a retirement company out there that will allow you to take out 10% yearly without penalty? i ask not because i intend to do this, but because I try to prepare for the unexpected and we certainly had some of that happen recently. if it weren't for the money in my 403b account we'd be totally depending on credit as we depleted our savings to pay off a credit counseling account before our baby came. just rock throwing please LOL Wink
#goodnatured - Says,

Have no clue on the retirement question, sounds like one that you should throw out there on its own and see what types of responses you get.

28 is not too young to start thinking about retirement, it is smart to start these things while you are young and have the flexibility to change.

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