Does setting financial goals make you anxious or even frustrated? Have you tried to be proactive but faced hiccups along the way that threw you off course?
Everyone has the desire for financial freedom, but often there are obstacles in our way. How you react to them will be the key to your success.
Setting Financial Goals
A financial goal is a target that should have a monetary value and a time frame in which to achieve it. For example, “I want to pay off my credit card balance of $2,000 in the next six months.” When you set a financial goal, you need to consider the resources and time it will take to achieve it. You can then budget your cash flow accordingly.
Be realistic. If you set a goal that requires resources you don’t currently have or with too short of a time frame to meet it, it can be discouraging.
You should feel positive and confident about your goal.
Monitoring and Maintaining Financial Goals
You’ve set your goal. You have a budget and plan to achieve it; now to maintain the plan:
- Revisit your objectives and adjust your goal accordingly.
- Look at your savings vs. debt annually to show your increase or decrease in wealth.
- Meet with your wealth professional regularly to keep on track. He or she can also make you aware of opportunities you might not have thought of.
- Don’t be hard on yourself. Focus on one goal at a time and celebrate your accomplishments.
It’s also important to keep in mind how an emergency can impact your financial goal. There are a few ways to protect against a decrease in cash flow during a crisis. A typical emergency savings fund should be 4-6 months of wages that are easily accessible. An insurance advisor can also work with you to develop a disability insurance plan to help recover lost income due to illness or injury, along with Critical Illness plans to help with extra expenses during a serious illness.
Setting financial goals gives you a clear focus of what you want to achieve, and the steps needed to make that dream a reality. You can avoid the pitfalls of procrastination, like forgoing growth opportunities or missing out on lower insurance premiums, by starting to set goals today. If you need help getting started, a wealth professional can create an easy-to-follow plan to achieve reduced debt, increased wealth, and a safety blanket in case of emergency. Financial freedom is only steps away.
Mutual funds are offered through Credential Asset Management Inc.