Tips on Setting Goals

Here are some five tips on setting goals. Goals are important because there are times when you will want to give up and forget about your plans to retire comfortably or have more time with family – and without having goals in mind, you won’t have the commitment to see your financial plans through.

Tips on Goal Setting 1 - Examine Your Beliefs:

Before you get started you should examine yourself and see if you have any negative feelings about money. If you have any hang-ups it might make it difficult for you to become wealthy.

I also urge you if you have a spouse or partner to talk about your financial goals together. That way you're on the same page and will work together on your finances.

"It's a funny thing about life; if you refuse to accept anything but the best, you very often get it." W. Somerset Maugham

Your thoughts which stem from your beliefs will dictate your actions, which in turn will produce a result. If your beliefs are aligned with your goals, then acting will be easier which means you are more likely to reach the desired result.

This actually becomes "a feed forward loop". Once you reach a goal, you realize you can actually accomplish what you set your mind to, which means you are more energized. That extra motivation pushes you even harder to get the desired goal.

Tips on Goal Setting 2 - Set Specific Goals:

So what are your financial plans ? Why do you work ?

Is it to have more comforts such as a larger home or a large screen TV ?
Is it to have money to send your kids to college ?
Is it so you can retire at 50 ?
Is it to give to charity ?

What is it that motivates you to work, and hopefully to save and invest ?

This is actually a really important question because the bigger and stronger the why, the more powerful the emotional tie will be. The more powerful the emotion, the more likely you are to do it. In some cases this will be counter intuitive.

Let me illustrate it this way.

We all know that diet and exercise is good for us right ? Then why aren’t we all buff and fit ? For some people looking buff and fit is important to them, they like being attractive to the opposite sex and so they are very committed to their health. Other people couldn’t be bothered until they have a heart attack or are told they have diabetes and better do something about it.

And then they really do something about it.

Now we all know it is good for us to be healthy but until we are convinced deep down that we “want to be fit” few of us really do it. It is not logical but it’s true more often than not.

We just don't have a strong enough reason "why" to motivate us. This is the most important of the tips on setting goals I can think of.

The same goes for financial planning. The best tips for setting goals in financial planning is to find out what exactly gets you motivated. It can be something positive like “I want to have a great vacation” or something negative like I don’t want die penniless.

Make it a goal to learn where and how how you spend your money - you'll feel much better about things once you get to know your money better. Education is the key !

Tips on Setting Goals:

1 - Set high goals. You need that brass ring that "heaven should be beyond a man's grasp or what's a heaven for". You need a goal that gets you excited and lit up. We'll break it down into "realistic goals later", but first THINK BIG.

2 - Clearly Envision Them. See yourself achieving what you want to achieve. Where are you ? What are you doing ? Who's with you ? How do you feel ?

This is critical.

Use your imagination. The more detail the better. It will link the goal with powerful emotions - emotions that will override your logic and will keep you going when the chips are down.

Is your goal saving for your young child's college ? How will you and they feel if they could go to an Ivy Leagure school ? How will you both feel when they graduate ?

Be specific about these milestones.

If there's a number you have in mind, write it down. Then have your goals close at hand - cue cards or a list on the fridge. Keep pictures if it helps. This will constantly remind you of what you are doing this for.

Goal Setting Tip 3 - Have An Action Plan to Achieve Them:

After the goal is set a specific action plan must be there to ensure you take consistent action to bring the goal to fruition.

What specifically will you do to achieve these goals. It can also help to split your goals into:
short term (3 months)
medium term (3 months - 1 year) and
long term (up to 5 year) goals.

At the beginning of this process, it's important that you set quick, attainable goals at the beginning to get this feed forward loop started. You have probably heard the expression "success begets success", and it's true.

By attaining a desired result, you increase your capacity to believe you can achieve your goals, so you will more likely act, which means you will more likely succeed.

Tips on Goal Setting 4 - It's the Journey not the Destination:

You may not achieve your goal the first time round, but by attempting to get their you have become better - unless of course you want to be like Lex Luthor and take over the world. Your character will have grown, and its character that will see you through to the end.

Don't fear failure. Failure hurts, but it is often necessary to experience failure in order to achieve the greatest success. Do not unconsciously sabotage yourself by not setting any goals in which you might fail.

Don't fear rejection. People are often afraid that if they are unsuccessful at achieving a goal, others will be critical of them. This is remedied by keeping your goals to yourself at the outset; let others see your results and achievements once you've accomplished your goals.

Reward Yourself. By rewarding yourself, you will start associating your success with your those powerful emotions you get when you get something you want. Of course, this should not compromise all the hard work you've done uptil then and it should be commenserate with the goal.

Hopefully these few tips on setting goals will help you get excited to start managing your personal finances.