Course 3: Goals

Lesson A: Establishing Goals

According to some estimates, less then 5 percent of the population has clearly defined financial goals. Yet setting financial goals is the first step to developing an effective spending plan. Goals are the road map to financial freedom. When effective goals are set you’re affirming to yourself that you have control over your future.

Values
Our values are what we hold dear, what we represent. Each day our values influence our financial decisions: the goods and services that we buy and use, the goals that we set, and how we use our time. When you understand what your values are, you will find it is easier to set goals that you canachieve.

What are Goals?
You may have goals that are only mental. That’s all right. All of us have some goals in our minds only. However, when you write down your goals, you are forced to think about if the goal is something that you need or want. It also helps you identify the time and financial resources needed to accomplish the goal.

• Goals state what you want to do or achieve. Financial goals help you to determine where you want to go with your money.
• Goals should be an extension of your values. They must relate your beliefs to be rewarding and satisfying.
• Goals need to be specific. They must be written in terms that are measurable.
  

Short Term Goals
Short Term goals can usually be completed in four years or less. Some examples of these goals are; paying down credit card debt or a down payment for a home or car. Short Term goals often require a strategy for accomplishment and can often be broken down in to smaller more achievable goals.

Long Term Goals
Long term goals relate to what you want to accomplish in five or more years. Long-term goals require more resources for achievement. There may be conflict between short and long term goals. Short Term goals often serve as bridges for moving you from where you are to where you want to be. However, if your short term goals are not related to the achievement of long-term goals, progress toward reaching long-term goals may be slowed or even stopped. To achieve long-term goals, you may find it necessary to give up something you would like to have now. This may require eliminating some short-term goals.

Conflicts
To help resolve conflicts that may arise examine each goal by asking these questions:

• Is this a goal that must or should be reached?
• Does the goal contribute to what you want to do as an individual or a family?
• Will the goal help you achieve what you really want?
• Is this a goal that could be delayed?
• Is the goal important to the wellbeing of yourself or the whole family?
• Is the goal so important it must be reached even though it would prevent reaching other goals?
• Can the goal be achieved using the resources you have?
• Is this a realistic goal?

Planning
Planning brings your future into the present. Remember, if you are serious about achieving your goals, you will want to work on only two or three goals at a time. You will need to develop a plan for reaching your top two or three goals. A successful plan for reaching a goal will include four basic parts:

1. Your plan should be a specific, measurable statement of the goal.
2. When you want to have the goal completed.
3. The resources that you will need.
4. The specific steps you will have to take to reach the goal.
   

To achieve your goals you must start now. The keys to achieving your goals are motivation, commitment and discipline. No one but you can put your plan into action.

• You must be committed to achieving your goals
• You must practice discipline
• You must be willing to defer things that would be nice now for the things that you really want later.

Plan Flexibility
Making your plan flexible will enable your plan to withstand any unforeseen events that may occur. Monitor your plan on a regular basis and adjust your goals as needed. Once a goal is achieved, move on to the next one. Establishing and achieving your goals takes self motivation, commitment and discipline. A goal only has value when you act on it.

Exercise
Use this goal worksheet to establish a written record of your goals. Be sure to set realistic target dates and cost/resources needed. Use the “what needs to be done” section to document the smaller goals that will lead to the achievement of the main goal.

Click here to download the a printable goal worksheet

Quiz

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