With 2019 right-around the corner, it's time to start thinking about what we would like to achieve in the coming year. Many have goals pertaining to finances, whether it's to save for retirement or a large purchase, build wealth through investment or reduce debt.
Create financial goals you're sure to achieve
When we set goals, it is always with high expectations and good intent. However, a few months into the year, after the initial motivation is gone, many will struggle to stay on track. What we are missing is a solid plan of action to guide and motivate us so we stay on the path to achieving our goals.
Here are ways to keep you on track:
1. Identify what you want. We often don't reach our goals because they are not what we want, but what others say we should want. For example, you may feel compelled to focus on boosting your retirement savings because that's actually more concerned about eliminating your credit card you to increase your retirement account contribution while you pay off debt, if creating a debt-free lifestyle is your goal, make reducing debt your top priority.
2. Assess your financial situation. Once you've set your priorities and know what you want to achieve this year, review your complete financial situation. Include your most recent bank, investment and debt statements and include other financial information you deem important. The objective is to obtain a complete understanding of your income and expenses so you can create realistic financial goals.
3. Set SMART Goals. when creating your goals keep this acronym in mind. S=SPECIFIC & WRITTEN, M=MEASURABLE IN PROGRESS & COMPLETION, A=ATTAINABLE, R=REALISTIC IN TIME & SKILL, T=TIME
4. Make a plan. Once you've specified your goal, create a plan to make it a reality. Instead of trying to create the perfect plan, focus on defining the activities you will do to reach your goal.
What do you track to achieve your goals?
A BUDGET. A budget will provide a visual representation of your spending activities, income and expenses. If you're looking for extra money, identify ways to reduce your expenses, specifically non-essential expenses that tend to add up, such as frequent restaurant dining, online shopping splurges, etc.
EXPENSES. Closely tracking your expenses helps you commit to your budget and ensures you have extra money to apply toward reducing your debt or increasing your savings.
DEFINED STEPS TO ACHIEVEMENT. Create a specific plan with defined steps to achieve your goals.
5. Place a visual reminder of your goal in sight. Having your goal in clear view daily is a powerful reminder and motivation for what you want to achieve.