Financial planning is one of the most relevant & important aspect of life growth, especially as an entrepreneur. Over time, money management have proven to be a difficult task. It often requires focus and dedication to manage money well, consciously spend less, and deprive yourself of some things, in order to achieve your financial goals. Nevertheless, setting realistic financial goals is vital to achieving success.
Financial goals serve as guide to manage your hard-earned money, and give you the sense of working for something, with the road map to where you’re going. As an individual, entrepreneur or business owner, setting achievable financial goals is the best way to thrive, and go above financial obstacles.
How then can you set these achievable financial goals? How can you effectively manage your money? We’ve compiled some proven strategies that’ll help you set achievable financial goals. Here are 7 relevant steps to take in order to set realistic financial goals and see your finance grow.
1. Highlight your Core Specific Goals
It is required of you to understand your core financial goals before creating a plan. Know your short term and long term goals. Ask yourself several relevant questions about what you intend achieving with your financial goals. Do you want to spend less so you can have money to finance your business? Are you planning to buy a car? Or perhaps you want to pay off a chunk of your debt. Pen down your core goals, and make sure you’re very specific with the terms involved. For example, if you want to pay off a debt, set a specific amount to pay instead of having a vague goal.
2. Breakdown your Financial Goal
Once you know what your financial goals are, break them down and take them one after the other. It might not be a good idea or totally feasible to work towards all your financial goals at once. You can list them based on preference and take on them bit by bit. Also, it’s a better idea to take action steps that are similar consecutively.
3. Align Goals with your Values
Figure out what your values are, and align them in a way they’ll complement your goals. Your aim is to do everything it takes to improve your personal finance. Know your worth, and try to make it work out with your financial goals. It’ll be very difficult for you to achieve your financial goals if you can’t align your goal with your values. Almost everyone who was able to align their goals with values found it very easy to succeed in achieving their financial goals.
4. Make Spending Priorities
This is one of the most important steps in setting achievable financial goals. Effective money management is the sole reason for considering financial goals planning. For you to achieve that, you must prioritize some things and let go some things. A better way to do this is, creating a checklist of how you spend money monthly and let off some irrelevant expenses. Thereafter, create a budget that’ll cover all your expenses with a comprehensive look at your income, and determine the perfect way to spend and save money.
5. Plan Yourself
Not only should you make spending priorities, effectively planning yourself to honor these priorities is another thing to give consideration. Depriving yourself of some things you’re used to won’t be easy, and that’s why you need to plan yourself well. In planning yourself ahead, make sure you remove expenses that seem to be surplus instead of necessity expenses. Try to create a feasible spending plan.
6. Invest in Yourself
Saving alone might not be enough to meet your financial goals. Investing in your future would go a long way to helping you achieve your financial goals, especially long term goals. Take a look at how you’re planning to meet your financial goals, and figure out how you can invest your resources to make your goals easily achievable. Take time to research the options available for you to increase your resources. If you find a couple of that, try to use them to your advantage.
7. Regularly Check on your Progress
After making, and starting to work on your action plan, make sure you regularly check yourself to see if you’re doing things just as planned. Financial planning would yield results if only you stay on track. For you to stay in line, it might be a good idea to have a financial advisor who’ll help you manage your plan. You must do everything that’ll make sure you’re staying on course. Regularly look at the changes in your income and expenses to see how you can adjust your obligations to your financial goals.
A Practical Example of an Action Plan to Setting Achievable Financial Goal
Financial Goal: I want to save $1,000 monthly
Monthly Salary: $3,500
Plan: I want to cut some expenses and do extra work
- Lower my phone bill by $40 a month
- Lower money spent on junks by $100 monthly
- Reduce entertainment costs by $200 monthly
- Lower money spent on grocery by $100 monthly
- Lower money spent on transportation by $60 monthly
- Make extra money by tutoring 3 nights per week ($400 monthly)
Total money save: $900
This is $100 short of the goal, then try to cut off more expenses the following month just to meet up or probably exceed your goal.
Conclusion Effectively managing your money might require much effort especially if you have series of expenses you cover monthly. However, it is achievable. It only requires you to follow the relevant steps to setting achievable financial goals. At the start of the action plan, you might find it uneasy to keep up, but with focus and determination, you’ll certainly achieve your financial goals.