Financial Goals - Part 1

We discussed Career Goals earlier, but although finances certainly come into play when setting career goals this section will focus on financial goals such as long-term savings and ways to cut expenses immediately.

In order to ensure your financial security you must:

  • Live within your current means. Plan a modest budget and stick to it. Try to use credit cards solely for bills you intend to pay immediately rather than as a means to purchase items you cannot currently afford.
  • Develop a financial safety net so that when an unexpected job loss or retirement arises you are well covered.

Establishing a safety net takes time, discipline and a solid set of financial goals.

Four Steps For Setting Financial Goals

Step 1: Identify and write down your financial goals, whether they are saving for a down payment on a house, saving up enough cash to send your kids to college, buying a new car, paying off credit card debt, planning for you and your spouse's retirement, or even something as enjoyable as going on a vacation.

Step 2: Break each of your financial goals down into several short-term (less than 1 year), medium-term (1 to 3 years) and long-term (5 years or more) goals. This will make achieving your safety net and financial goals much easier.

Step 3: Educate yourself and do your research. Read financial magazines, books about investing, or surf the Internet's investment web sites. (Just take what you read on some sites with a grain of salt since anyone can profess to be an expert on the anonymous Internet.) Do not be afraid to explore the possibility of playing the stock market.

Yes, there is always the potential you can lose some money on the stock market, but if you do your research and work with a trustworthy broker you can better ensure your financial future. The key is to avoid putting all of your eggs in one basket. Diversify your portfolio.

With a little effort you can learn enough to make educated decisions that will increase your net worth many times over. Consider identifying small measurable steps that you can take to achieve these goals, and then put your plan to work for you. If you are uncomfortable with the notion of playing the market, you can instead invest your money into funds that cover the stocks of solid and virtually "bulletproof" Fortune 500 companies. This way you minimize your risk by sticking with established winners, and if one company's stock value plummets the diversified nature of the fund will better protect your savings.

Step 4: Review your progress monthly, quarterly, or semi-annually at a minimum. It's important to evaluate your current position to determine if your program is working and your financial goals are being met. If you're not making a satisfactory amount of progress on a particular goal, reevaluate your approach and make changes as necessary.

There are no hard and fast rules for implementing a financial plan. The important thing is to at least do something as opposed to nothing, and to start NOW.

Sometimes when people write down their goals, they discover that some of the goals are too broad in scope and/or nearly impossible to reach, while others may seem more manageable and easier to achieve. Your goal is to find the perfect balance. It is okay to dare to dream about obtaining significant riches, but try to be realistic about what you can actually do in a given span of time.

Shoot for the stars (if you never try, you'll never reach them), but don't chase after unrealistic dreams. You need to rely on solid financial and career goals to rake in large sums of money – dreams alone will not be enough.

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