LEARNING HOW TO SET THE RIGHT GOALS WILL HELP YOU ACHIEVE FINANCIAL FREEDOM
As things change, you must keep adjusting your goals according to your new needs and wants. Learning how to set the right goals will help you achieve financial freedom.
WHAT DO YOU WANT OUT OF YOUR GOALS?
Here’s the thing – you can’t just set goals and expect to meet them. You need to know the meaning behind them. Why are you setting the goal? What are you trying to achieve? Ask yourself, is it a short-term, mid-term, or long-term goal? When do you need to meet the goal? What are you trying to get out of it? Is it:
- Financial freedom
- A specific act (such as buying a house or paying for a car)
- Saving for a specific time, such as retirement
Knowing what you want out of your goal gives you more direction. You’ll be more motivated to follow through and meet your goals when you know the end result.
ARE THEY ACHIEVABLE?
Don’t set lofty goals. They may look great on paper, but if they aren’t achievable, there’s no motivation in it. If you feel as if you’ll never meet your goal, how will you move forward? What motivation is there to keep sacrificing so you can save for that goal if it feels like you’ll never reach it?
For example, let’s say you want a 20% down payment on a home and you’re budgeting for a $300,000 home. You need $60,000 for a down payment. If you set your goal for $60,000, it seems impossible to reach, right? What if you set your goal for less than that to start? Even just the first $1,000 gives you a milestone to reach. Once you reach it, set the next goal, maybe for $5,000. As you hit these touchpoints, you’ll feel motivated and ready to keep going.
BUDGET YOUR GOALS
Don’t just write your goals down on paper and think you’ll achieve them. Actively work them into your budget. What does that look like?
Let’s say you have a goal to save $1,000 in the next six months.
Add $167 to your budget as a line item. Open a separate account too and save the money there. This way you know this account is earmarked specifically for that goal. When you make a line item for your goals, you’ll also see if you have to sacrifice and/or make changes elsewhere to accommodate the goal.