FINANCIAL GOALS: Why Financial Goals are Important For Your Financial Success
Setting financial goals is a critical step towards financial success, stability and security.
It takes time: learning a new skill takes time, building a business takes time but from an early stage you decide on the long-term goals and objectives of the end goal.
Likewise building wealth is simple but it takes time and a little more effort and discipline, Financial goals are needed.
Steve Down the author of Financially Fit for Life carves that Your goals are how you take steps to achieve your wealth vision.
A money goal is a target aiming at managing your money. It can involve spending, saving, investing or earning.
Creating a list of financial goals is vital in one’s financial life. When you have a clear picture of what you’re aiming for working towards that target is easy.
DIFFERENT TYPES OF FINANCIAL GOALS
SHORT TERM
MIDTERM
LONG TERM
- SHORT TERM
Your short-term goals are derived from your long-term goals. Simply put, taking your long-term goals and breaking them into small bits that are achievable and realistic. Short term goals also take a shorter time to achieve a maximum of one year.
Your short-term financial goal can be to save a certain amount of money by a certain time. Paying off a soft loan or buying a seat, tv or fridge.
2. MIDTERM
Your mid-term goals are goals that take a little longer than a year, these goals take five years or even more. This is dependent on what your goals look like.
This could be finishing paying a loan, building a sustainable emergency fund etc.
3. LONG TERM
Some of us aim high, wanting complete financial independence and stability, to have our own home, start a family and be able to give our children a time or to be able to afford to give up work and travel.
These can be examples of long-term goals.
WHY IT'S IMPORTANT TO HAVE FINANCIAL GOALS.
- You need to know where you are going.
What do you want to achieve financially? How do you define your financial success?
Setting financial goals will help you to answer both of these questions. Once you have your answers. These have to be tailored made and have to be unique to match your specific goals.
With an end goal to work towards making the right decisions become easier.
- Financial goals show you what you need to save and it only provides strategies on how to achieve that.
Your financial goals will dictate the strategies you need to use in order to achieve them. If your financial goals are modest, it might be enough to save a bit extra each month.
- They keep you accountable, financial goals will keep you in check and show you the kind of progress you are making. It's like a chart that keeps you focused.
- You can find the right tools to work with.
Setting financial goals will enable you to critically evaluate which tools can help you on your way so you can buy only those which are most useful to you.
There’s no point in wasting money on unnecessary products. Save your cash for priority expenses; genuine needs.
Have you already began working on actionable attainable financial goals you’ve set? If you have a hard time creating a financial goal, follow Financially Fit to get tips on setting goals and following principles that will change your financial life.
