Have you ever heard that you should set financial goals? Setting financial goals may sound scary or it may sound fun, but regardless as to how it seems to you, the reality of the situation is that it can be tricky.
Setting goals for your money doesn’t have to be hard! If a healthy amount of thought goes into financial goals before they are set, the odds of attaining those goals skyrocket.
via via https://www.flickr.com/photos/jurvetson/
Here are two great questions to ask yourself while setting your financial goals to keep you on track:
What do you want your finances to do for you?
The first thing that you should do when you start thinking about setting financial goals is to ask yourself what you want your finances to do for you. For instance: do you want to be super-wealthy? Do you want to maintain your current lifestyle? Would you like to improve the financial situation, either for yourself or for your family?
There aren’t any correct or incorrect goals. There’s no right or wrong answer when it comes to things you want to achieve with your cash. It’s just important that you take the time to find out what you want out of your financial life, and then set your financial goals so that you can get what you want.
But doesn’t everyone want to be super-wealthy? Probably. But even though most people wouldn’t return a million dollar check, most people don’t have that on their list of things that they have to do in order to live life happily.
Where are you, and where do you want to be?
Another good thing to do when you are setting your financial goals is to look at where you are and where you want to be. If you want to drastically improve your standard of living, it might mean making some investments in your education, or in the technologies or equipment that you use. On the other hand, if you want to maintain your standard of living, that might call for you attending classes to maintain a certification, or finding secondary or tertiary sources of income so that you can keep up with the rising costs of living.
If you find that your current employment is simply not going to allow you to reach your financial goals, it might be time for you to look into going back into school, garnering certifications, or looking into other careers that you might be able to use your experience and education to segue into.
How did you go about setting your financial goals for the first time?
It’s incredible how you can boil down so much to two questions. I absolutely agree that you need to sit down and really think about these two questions if you want to reach your financial goals. First you need to know where you are at financially, then you need to determine where you want to be (and why). If you can do both of those things and make an executable plan you are well on your way to reaching your goals.
Thanks for your comment, YAM! I agree — sometimes simplifying things makes everything clear.
Asking these two questions is so important. You have to know where you are and where you want to be/go. If you don’t address them and have a plan, you are just going to stay stuck where you are, never making any progress. Then you’ll look back and wonder why you are where you are at.
Never making any progress… what an awful feeling!
“What do you want your finances to do for you?” We would like to be comfortable and be able to visit other family and friends without worrying much about cost. We have met that goal. “Where are you, and where do you want to be?” We are on target to pay for our son’s college so he can graduate with no debt. He is currently 13. We have no debt and live in a paid for house. We are on track to retire in 9 years. So we are in the process of meeting that goal.
Your answers are AWESOME! Congratulations!
I recently started setting my financial goals as a means to achieve FI. I posted them on my blog now too. once you can see the progress, it’s easier to keep at them.
Thanks for your comment, NNL!
Great post. I think sometimes we get so overwhelmed by all the little steps that we forget how simple the big picture is: where do you want to be?
Right on!
My goals have evolved over time. From when I was in college and just wanted to have a job so I could afford a car and a house, to now when I’m hoping to achieve financial freedom so that I don’t need the job anymore! It’s always good to take the time to think about where you’ve been and where you would like to go.
Thanks for your comment, Kay!
I love to keep things simple and these two questions really help with that. This is definitely something I’ve been thinking about more and more. Over time the goals have changed. For now it’s been all about paying off debt and saving.
Yes — sometimes it feels like you get stuck on a level of knowing where you want to be and having to put it into practice. Stay strong!
as I begin my decent into removing myself from the corporate world, I ask myself those questions often. I sometimes rephrase them to “how much do I need”, and “How much is enough”, and of course, “Will I run out..”
it’s all a journey, and we do not know when the music will stop. If you are still working hard, it was too hard.
It’s amazing how quickly freelancing can make you zero in on your expenses and that question of “how much do i need”!