How to set personal financial goals.

Almost any successful person, on the question of how important it is to set financial goals, will answer that success is impossible without this. The lack of a goal and plan of action forces people to waste time, miss opportunities and always remain dependent on circumstances.

It is necessary to set financial goals for any person, regardless of sphere of activity or income level, who wants to systematically advance his life and career up. The maximum that a person is doomed to, not setting goals and not following them is a stop at the same financial, personal and career level.

Let’s find out how to make financial goals, what they are and how they are achieved..

1. Setting Rules

Correctly defining a task is half the success. Surely you have at least once in your life seen how a step-by-step painted business literally burns in your hands, leaving no chance of failure. With personal goals everything is the same..

We give important theses of goal-setting:

• A goal is a measurable and concrete result of an activity. “I want to be rich” is a bad goal. “I want to earn $ 1,000,000” – good.

• There are financial and material goals. For example, “I want to earn $ 1,000,000” is financial, and “I want to buy a model XXX TV” is material. In order for a material goal to become measurable, it must be equated to a financial one through an equivalent, that is, “I want to buy a TV model XXX for 40,000 rubles”.

Often people set goals in the spirit of “going on vacation with the family next summer” or “saving up for a secured old age”. But there is no specificity in such a definition. How much do you need: 40,000? And maybe 140,000? Or even 1,400,000? If you do not know, then no one knows.

Here are some examples of correct and specific goals:

• Buy a new refrigerator for 30,000 rubles;
• Get a mortgage and make an initial payment in the amount of 600,000 rubles;
• Make repairs in the house for which 150,000 rubles are needed;
• Save 700,000 rubles for a new car.

Accurate wording is good, but it’s equally important to define a plan or schedule. They are necessary to determine the period for achieving the goal, with an orientation to which you can edit the stages to find a balance.
Here is an example. You want to buy a refrigerator for 30,000 rubles, and initially you plan to save 5,000 rubles every month. Thus, the goal will be achieved in 6 months. But let’s say that this period is too long for you. You understand that you can deposit 10,000 rubles a month into the savings and find out that the required amount will be collected in 3 months, that is, 2 times faster.

2. Duration of achievement

Depending on the time required for implementation, the goal may be:

• Short-term – up to 1 year;
• Medium-term – up to 5 years;
• Long-term – from 5 years.

The optimal time for determining short-term goals is the beginning of the year. For most people, looking at a calendar year as a reporting period works best. Therefore, in December-January, you need to think about what you want to achieve and write down. For example, like this:

• April-May: buy a new computer (35,000);
• July-August: go on vacation at sea (90 000);
• September-November: to make repairs in the apartment (175 000);
• Total: 300,000 rubles.

There are all the signs of a correct list of goals: the exact amount, timing, sequence of actions. Of course, the list can be supplemented at your discretion by adding sub-items, an accumulation schedule and other items. But it’s very important that it remains simple and straightforward..

Medium-term goals are set for the next 3-5 years. In most cases, these are large purchases related to transport and real estate, the accumulation of capital for business or other purposes, the creation of a financial airbag and saving money for the education of children. In general, here you need to do the same:

• Remember what you want to achieve;
• Form a list;
• Count the equivalent;
• Define stages.

As a rule, long-term financial goals coincide with medium-term ones, but require more time for implementation. In addition, pension accumulation is often included here. An impressive planning horizon creates some difficulties, as a number of events can occur that affect achievement. At a minimum, it is necessary to carry out calculations taking into account potential inflation. But even if there are poorly predictable factors, long-term financial goals are effective, if you keep your finger on the pulse of events.

3. How to plan and achieve

Many people know that a table in Excel or a list in a diary looks very convincing, but in practice, fulfilling financial goals is a difficult obstacle course. Success consists not only of the correct definition of tasks, but also of behavior, daily habits. Here are some tips to help you..

Quality is more important

Forget about multitasking. It is difficult to deal with a large number of goals simultaneously. Most likely, it will be difficult to keep everything under control. You will get tired and, perhaps, do not perform any of them. Choose a few critical goals that you can pay attention to and work on them. The rest will wait in the wings or lose relevance.

Balance of time and quantity

It is logical that a large goal requires a large investment of effort and time. It is better that there are no more than two global medium or long-term goals. Small financial goals for which years of labor are not needed are normally fulfilled and 2-3 at the same time.

Phased promotion

Any person going to a specific goal is more effective if he sees progress. It motivates, it convinces of the success of what is happening. Therefore, goals with any implementation period must be broken down into stages, and after they are completed, revise the task and determine new steps.

Imagine that you want to earn 1,000,000 rubles to buy an apartment (whether on a mortgage or not, it doesn’t matter). Such a simple wording is too vague – it is easy to lose control over the situation in the process of execution. A phased plan needs to be developed. For example, this:

• During the first year, save 150,000 rubles from the salary, saving 12,000 per month.

• At the beginning of the second year, send the accumulated to the bank at interest. During the year, continue to save 12,000 rubles per month for this amount.

• Continue to use this strategy until an amount of 1,000,000 rubles accumulates in the account.

This is an exaggerated plan. It can be improved by increasing the monthly installment, using additional sources of money, plans for job changes, etc..

Goal Adjustment

Long-term planning is difficult. Especially when you live in such a peculiar country as Russia. Goals that seem real and well-planned today can become unbearable in a year or two. The personal or family situation is affected by the loss or change of work, maternity leave, reduction, childbirth and macroeconomic factors..

But do not give up goals that have become unnecessarily complex. It is important to continue to implement them, making adjustments. Let instead of 10,000 rubles you can save only 4,000. This is normal. The main thing is to ensure progress. Dates, of course, will stretch, but you will still move to the finish line.

Fixed Goal Accounting

The right financial goals are fixed goals. No matter where: in a smartphone, diary, computer. You can try to keep and inspect them in your head, but practice shows that most can not cope with this. In addition, the real picture of the process is distorted: the remainder of the time, current progress, completed steps, etc..

You can use Excel to save and verify goals, notepad, notes on your phone or use the services of special applications and sites.

4. Financial habits

Nothing affects the monetary confidence and success of a person, like a set of financial habits. Pay 5,000 rubles to your bank savings account if you decide to do this, no matter what happens. At a minimum, try to do your best to follow this habit. Putting aside comments like “now I have little money, next time I’ll put twice as much” kill all progress. Show character and perseverance, act through force. Soon it will become a real habit – light and natural..

5. Start small

For many, the practical implementation of the steps presented in this article is difficult. They believe that the financial goals are too large, and the current situation simply excludes their implementation. Do not be alarmed. The numbers and dates may seem impressive, but they are exactly what you can do. See for yourself personally by starting with a few short-term goals. Define them, set deadlines, develop a plan and watch how your confidence grows with progress. And having completed small tasks, move on to larger.

Similar articles

• The principles of financial success in the modern world – 7 rules.

  Whenever a person makes a balanced decision, it is usually based on internal principles. Principles are a set of rules that you follow…..

• Personal Finance Management – 15 Important Tips

  If you have just embarked on the path of financial independence and are trying to make some attempts at saving and planning, then you probably have enough…

• The main thing – accounting – How to make a budget

  Budget is the main part of financial planning. It is not only about the long term and goals, but also simple expenses for every day. To…