Setting goals is critical to achieving growing financial independence. When they fail to set goals, most people are less motivated to push through difficulties to reach a successful conclusion. At work, you might have a boss breathing down your neck, so it’s easier to push on and attain your goals, but in your personal life, there is less motivation when things get tough. However, setting achievable goals can help you achieve financial independence.
Here are some useful suggestions for setting effective goals in your quest for greater financial freedom.
Goal Anatomy: Understanding Before Attainment
Goals are necessary to achieve great things. It’s possible to build towards a better financial future without goals, but the outcome is less certain.
We must pursue meaningful goals. Having some positive emotion behind them matters. Money is often an emotive subject for people – perhaps it is for you too – so that can provide extra incentive.
Projects and tasks need to necessarily move you toward your goals. When they do not, then that’s a wasted opportunity. To set the right tasks or projects, goals need to be specific, often measurable, and with a time component.
Even if you cannot set a time limit on them, a rough idea or the steps necessary to attain the goal should be broken down. Then tasks can be created so you can proceed successfully through each step, whatever it is.
Also, read some literature on goal setting. Brian Tracy has some excellent goal-related books and audio recordings that are well regarded.
Read more: How To Save $5000 This Year
Build Your Financial Goal-Setting Muscles
Start with small goals, projects, and tasks.
Get used to the feeling of completing tasks, ticking them off, and then moving on to the next one.
With financial matters, the goal might be to “Reduce expenses by 5%.” Some steps toward this might include reducing the grocery bill by $30 a month, dropping the gym membership, or treating yourself a little less often.
Once you’ve gotten good at knocking off smaller tasks and one-task financial goals, create a goal with multiple steps to complete it. Plan how you’ll approach the first step, get it done, move to the second, and so on until the goal is completed.
When you’ve done this a few times, you’ll begin to develop new confidence in goal setting and attainment. This will certainly help in the financial arena but will also work well in your job or small business.
Long-Term Financial Goals
Graduating to long-term financial goals is the next right thing to do once you’ve become more adept at meeting your goals.
The trick with long-duration goal setting is that considerable patience is required. In our financial lives, there are often concurrent money-related objectives that require several years or even decades to achieve.
The longest is likely retirement. However, saving up a significant deposit to purchase a starter home is a major milestone for millennials due to the high cost of real estate now. This blog post discusses four long term financial goals that will deliver more security. Note that it’s a good idea to break longer goals down into meaningful smaller milestones and to celebrate them. For example, getting to 10% of the sum needed for financial independence is cause for treating yourself.
Also, use online tools and apps to help with financial goals. The Tally app can assist you with long term financial goals such as accelerating debt payments to save on interest charges. Debt consolidation through Tally is also an option for some people too.
Look for Ways to Accelerate Financial Goal Achievement
Don’t be afraid to look for ways to make more money to achieve financial goals sooner.
While reducing expenses is always worthwhile in the journey toward financial independence because lower spending means less is required to quit a job, it only goes so far. Sooner or later, reducing more expenses only saps the fun out of life, and becomes a poor bargain.
Instead, put greater emphasis on achieving your financial goal faster. This might involve reexamining whether it can be done for less, if frugal steps can be pursued to lower the barrier to entry, or if getting help will be smart. Is sacrificing some evenings or weekend time for a second income going to be a worthy sacrifice?
Is the Juice Worth the Squeeze?
The old saying that youth is wasted on the young remains true.
As a millennial, you’ll only be this young once in your life. Quickly, life will become more complicated with additional commitments. Usually, it will be more expensive too.
Don’t make the mistake of putting off things that are on your bucket list if you’re passionate about them. Certainly, make time for long-term financial goals, but also don’t lose sight of your interests. Some things aren’t as enjoyable or possible when you’re older. Don’t pursue goals so ardently that it doesn’t leave time or money for the fun stuff.
Ultimately, learning to set and achieve financial goals doesn’t just help with the greenbacks. It has a wider application in life, work, and happiness too.