Setting Financial Goals
Posted on October 31, 2007 in the Investing, Money category
.In a previous post we identified seven steps that you can do in order to improve your financial future. The first of theser steps is writing down your financial goals. Write down what you want to accomplish in the next 12 months, how you will do it and when you want to accomplish these goals. If you actually write them down you will be much more likely to stick to them. Then review them every quarter to see if you are on track.
Here are 4 ways to set good financial goals.
Step 1: Establish Positive Goals
Most people react better to positive thoughts than negative thoughts, and goal setting is no different, The goal you set should be a positive goal. For example “I will save to buy a home” is a positive goal, while “I will not spend money” is a negative goal. By focusing on the positive goal, that you are saving to buy a home, you will be more willing to reduce your spending, versus the goal of I will not spend money.
Step 2: Set a Date
Set a date for when you will reach your goal. A goal is not a goal until you set a date for it. Until then it is just an idea. When setting your date, make sure that it is attainable otherwise you will become discouraged and quit before reaching it.
Step 3: Write it down
Write your goal down where you will see it often. When you see your goal written down it becomes real. While this sounds hokey it works. Dartmouth College polled their graduating class of 20 years ago, asking one question: Have you established a specific written life goal plan? Only 3% of the graduates had done so, but when the college compared the net worth’s of the graduates, it discovered that the 3% who had created a written plan for themselves were, in the aggregate, worth more money than the remaining 97% put together.
Step 4: Stay Focused
Stay focused on your goal by focusing on the benefits you will derive by reaching your goal, not on the sacrifices you are enduring to reach it. If you can not perceive any benefits of reaching your goal, you will not achieve it.
Set your goal, give yourself a deadline, write it down, and stay focused. You’ll be amazed how far this will take you.
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