Set Your Goals, Set Your Sights

Part 1: Identify Your Direction

This article is about goal-setting. If you’re saying to yourself “I don’t need to do that”, “That stuff doesn’t work”, “Why waste the time; let’s move on to Step 2”, or any such like-minded thought, then you should pay particular attention because you’re in the overwhelming majority of the population. Did you know that, according to professional Financial Planners, less than one-third of their clients actually have any clearly-defined financial goals? And that’s just people who have even bothered to talk to a Financial Planner at all. Do you think the rest of the general populace has implemented a financial game plan? Probably not. And how are most people retiring? Generally, they’re retiring with less than three months’ salary in the bank and counting on Social Security, if they’re retiring at all. If that’s not the picture you want to see yourself in, then you’ll need to follow a different path. Remember, like actions produce like results.

Research studies show that goal-setting works. Regardless of the topic, establishing a well-defined goal helps you to focus your energies and actions in the direction that you want to go. Simply stated, if you have no target then that’s exactly what you’re going to hit, nothing. Without a definite direction you’ll proceed in, well, no definite direction.

The question, therefore, which must be answered is, “What do you want?” What is it that you want your money to do for you? Do you want to buy a house? Houses? Send the kids off to college? How about retirement? Would you like to retire early? And how comfortably? These are the things that you, and your spouse if you’re married, must sit down and think seriously about. Once you have these answers, you’ve accomplished the first step. Make sure that you write them down; it will help you to more clearly define them by making them more visible in your mind’s eye.

You’ve got your paper in front of you with your goals clearly written. Now you’ve got to formulate a plan to help you reach those goals. It’s good to have big goals; in fact, it’s encouraged. But they can sometimes seem daunting once you’re looking at them in ink. It may be difficult to see how you’ll ever be able to reach them. That’s why it’s advisable to break up the pathway to your objectives into short-term and long-term goals. For instance, you may want to buy a home in five years and you want to have $15,000 for a down payment. For most people that’s quite a sizeable sum of money to have to save. But you take out your calculator and come to the realization that if you can put away $47 a week and get 8% interest on your savings, in five years you’ll have reached your goal. $47 a week seems much more manageable than $15,000. And that’s the very point. When you break down your long-term objectives into manageable and measurable short-term steps, you’ll find that you’re building habits of success in reaching your goals as well as discipline, and you’ll always be moving in the direction that you’ve set for yourself.

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