Do you have financial dreams or financial goals?
While they may sound like the same thing; they're not. A financial dream is something you hope for; a financial goal is something you've planned for. And it's the planning – not the hoping – that turns financial desires into financial reality.
What Does a Financial Goal Look Like?
A financial goal states:
- what you plan to accomplish
- what resources you'll need to make it happen
- how much time you'll need to make it happen
- how you plan to make your goal fit into your overall budget and life
Ready to create your own financial goals?
Time Required: 30 minutes- 1 hour
List your financial goals.
Print out a copy of the Financial Goals Worksheet: Color | B&W, and use it to list your goals by how long you think it will take to achieve them. Place goals that can be accomplished in under six months under "Short-Term Goals," goals that can be accomplished in six months to a year under "Medium-Term Goals," and goals that will take more than a year to accomplish under "Long-Term Goals."
Estimate the cost.
How much money will it take to reach each goal? Create an estimate, and write the resulting figure under the "Estimated Cost" category.
Set a target date.
When do you hope or need to meet your goals? Set a target date for each goal on your list, and use this as your deadline to meet or beat.
Determine how much you need to save.
Divide the estimated cost of your first goal by the number of weeks until your target date. This will show you how much money you need to save each week to meet your goal. Enter the resulting figure in the "Amount to Save Weekly" column, and repeat for all of the other goals that you've listed.
Budget for your goals.
Rework your budget to include the money that you need to meet your goals. Then, put your plan into action, and watch those financial goals turn into financial reality!
- Be realistic about how much time and money it will take to accomplish each goal – an estimate that is too low will only frustrate you.
- Keep your motivation by revisiting your list frequently to check on your progress.
- Setbacks will happen. If something throws you off of your target date, don't give up – set a new date.
- Have more goals than you can work on at once? Then, determine which ones are most important to you, and make those your first priority.