But when it comes to financial security and retirement planning, we don’t have a choice. No matter your current situation, it is of the utmost importance that you treat your retirement dreams and desires as a goal. Why? Because without your dream or vision of where you want to be 10, 20, 30, 40 years from now you cannot create a plan to help you get there. And that’s where it all starts.
How to get started?
Where you currently are and where you want to eventually be are simply two locations on a map. From a financial goal setting standpoint, your map, journey and choices will be different from others. To be able to set your course, it will be important to have a clear grasp of your capabilities and what you want to achieve during this journey. Taking stock of your situation can be sobering given the level of introspection and hard questions you’ll have ask yourself. But you can simplify the process by asking yourself a few questions.
Where are you going?
Before you can properly set your goals, you have to know where you want to go, what you want to do. It’s easy to say “I want to be rich,” or “I want to live in a big house,” but it is virtually impossible to succeed at a goal if you don’t take the time to fully define that goal in a measurable and attainable way.
Let’s say that you want to travel. If all that you’re ever able to articulate is that you want to travel in general, chances are you’re never going to get anywhere. It’s the same thing for financial goals. It’s not enough to want to be rich, or even just comfortably well off. Unless and until you have a specific goal in mind, like “I want to be worth a million dollars,” then you will not be able to properly plan your way to fulfilling that goal.
One important goal of any financial plan is to live within a budget that allows you to contribute more savings into your financial goal:
- How to budget: budget planning n’ management
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Who’s going with you?
When setting financial goals, it’s important to remember to plan them with all the people who are going to be involved. You and a partner might both be working towards the same trip to Europe, for example, but if your idea of working towards the trip is to cut expenses and save the money, while your partner’s is to put the money into a high-yield short-term investment, and you never actually stopped to agree on which one to do, then chances are very good you won’t be making that trip.
How and when are you getting there?
Having set your goal, it’s now time to get to the nitty-gritty of things and figure out the specifics of your financial plan. Think of each component as a step, a mini-goal towards achieving the big one. For most, a financial plan mainly consists of saving money. While it is very important to save as much as you can, there may be more additional ways to help you meet your financial goals. Talking to a financial planner will give you insight into the options, allowing you to develop a plan that helps you to achieve your financial goals.
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