From Dreaming to Achieving: A Step-by-Step Guide to Setting Financial Goals
It’s 7 pm, and you’ve finally gotten home after a long day of hustling and surviving the 30-minute traffic. “Let me get myself a bit of rest before I know what I’m gonna do next, “ you say to yourself and sink into the sofa.
Right there and then, it hits you why you wake up each morning and grind so hard. There is a lifestyle you’d like to achieve. A lifestyle that enables you to live the life of your dreams, impress everyone with your fashion sense, and not be in a state where your bank account limits you.
You go on and on thinking about what life would be like once you get there. All the magical solo night outs, all the pictures you could take of your outfits, the pre-planned trips… “How wonderful it would be if all that hard work would pay off one day,” you say to yourself,
Hey there, sorry for interrupting your whole vision situation going on there. For you to be able to get to where you visualize to be, you need to have a plan in place. This is where?financial goals?come into play.
Having financial goals in place is important when it comes to achieving what matters to you. Understanding how to come up with these goals, going about maneuvering them, and achieving them is a major step when it comes to putting your plan together.
Look at it as a way of outlining what is important to you, why, and how much to allocate to it. Here’s how to go about setting those financial goals.
1. Work Behind the Vision
A huge chunk of your financial goals will begin with your mindset. Your mindset towards money and your mindset towards any financial challenges or problems that you may get along the way.
The vision requires work and grit, which may not look as glamorous as social media portrays it to be. It may look like late nights, back-to-back meetings and calls, frustrations, and wins here and there.
2. List Down ’em Goals
Write down all the financial goals that come to mind. Want to go to Diani or?Zanzibar? Write that down (even though your account says otherwise at the moment).
Is it a specific car model that you want? Jot it down, hun! Do you feel that your wardrobe needs a refresh? Put it on the list. Is it a whole new range of skincare products? Put it on paper. The aim is just to get everything out of your mind and on paper.
3. Your Current Situation
Have a look at your situation currently, what would you like to improve about it? Probably you’ve been living from paycheck to paycheck and you’d want to improve that whole scenario. Budgeting would be the solution, so your goal would be?learning to create and stick to a budget, buying a budgeting course, or probably getting a financial coach to help you maneuver that.
Probably you would like to change how your space looks and feels to make it feel more calm and peaceful. Your goal might probably be centered around revamping your whole space or bits of your space at a time.
There are so many ways to go about a problem that you may have in your current situation. It all depends on the resources available and your preferred way to go about everything.
4. Prioritize and categorize
Financial goals are divided into three major categories:
领英推荐
The category in which your goals fall will depend on your priorities at the moment and overall vision. In some situations, a car may be a far-fetched goal so it may fall under the long-term category. But then making your space feel calm and therapeutic is more of a priority so it falls under the short-term category.
In other situations, you may badly need a car to enable you to get to work easily so that becomes a mid-term or short-term goal depending on your total income. But then again you plan on building your own home and that then becomes your long-term goal.
From there choose the goals you want to work on, you can choose more than one, and start planning.
5. Cover the basics
When I say basics I mean aspects of your finances that may prevent you from achieving your goals. Let’s put this into perspective, you’ve created a 'buying kitchenware' goal in the Chumz app?and you’ve almost attained the amount?you?wanted.
But then you get an emergency, or you get laid off and it forces you to dip into the kitchenware funds to finance the whole situation. Or you are not able to deposit enough money each month to your goal because you have a debt to pay off.
But let’s imagine that if you had an?emergency fund?in place or you had paid all of the debts you have, your goal would be simple and easy to achieve. No need to dip into the goal’s funds or contribute less than what you had planned.
6. Make a Plan
Time to map out how we’re getting that?kitchen?set. Making a plan involves:
There are so many minute details in between that cannot all be covered here.
Using the?50/30/20 budgeting rule?helps with being able to allocate part of your income toward your financial goals. You can?read more about it?here.
7. Check in Regularly
Regularly monitoring your progress toward your financial goals is a critical step in achieving your desired financial outcomes. The need to make adjustments may arise for so many reasons.
Here are some tips for effectively monitoring your progress:
Setting financial goals is a powerful tool that empowers you to take control of your financial future. By defining your objectives clearly, creating a plan of action, and monitoring your progress along the way, you can pave the path towards the financial freedom you so much desire.
What financial goals are you working on currently?