Setting your financial goals can be a big hassle. Not too many people even want to look at it as it can be overwhelming but without a roadmap, you can get lost. Setting financial goals is the same. It is about planning the life you want and creating a plan to get there. There are simple steps to get you there.
We at Karstens Financial offer an easy to access Wealth Building app but we can still walk you through some steps to give you some guidance.
First and foremost, you must take a moment to decide what you want to accomplish in the next 5, 10, or 20 years. Are you looking to retire early, own a home, travel, start a business, and let your imagination run wild and just put those down on a piece of paper.
Once you have your dreams written down, break them down into smaller or more manageable goals. These will be like milestones to your journey. For example, if owning a home is your dream, a smaller goal will be to be able to save up for a downpayment.
Don’t forget to prioritize your goals based on your values and timeline. Separate your short goals (that can be accomplished in 1-2 years) and your long-term goals (10+ years). This helps you figure out how to allocate resources wisely. For example, saving for your newborn’s college is a long term goal, while saving to take that trip to Greece in the next two years will be a short term goal.
Establish SMART goals.
SMART: Smart, measurable, achievable, relevant and time bound. Make sure that your goals can meet the SMART criteria. For example, if you want to make a goal for a down payment for that house. Don’t just say I need to save. But quantify it by saying, I will save $5000 by the next 12 months. This helps you make your goal achievable.
Also, be realistic in your goals. Analyze your income and monthly expenses and spending habits. This will help you understand how much you can realistically save towards your goals.
Next, develop a budget plan that will align with your goals.
You may have to track your spending to find expenses that are unnecessary, and you can push these funds towards the goals and your priorities. Creating a budget is your financial chart or GPS that keeps you on the right path and helps you remove unnecessary expenses. For example, that cable service that you are paying for but barely have time to watch. You can save by canceling that service and utilizing the rental option to save you hundreds of dollars.
While setting long term goals is great, it’s also good to ensure you have a saved emergency fund. This provides you with a piece of mind when you run into situations that are unexpected.
Always remember that life is dynamic, and things will change and its okay for changes to happen. Therefore, review your goals regularly and celebrate when you meet small goals. Every step you take brings you closer to the life that you imagined.
If things feel overwhelming, Karstens Financial is here to help you navigate the financial roadmap. Karstens Financial can provide you with guidance and solutions to your unique financial situation.
We will not only guide you, but also show you how to enjoy the process, learn from the challenges and help you celebrate your successes.