image by chiara bonetto
Christmas is just around the corner, before you know it, we will be in the new year!
At the beginning of the each year, most people are asked by their employers to work on their personal goals and objectives to ensure that they are aligned with the corporate goals and objectives.
Just like corporations, you should ensure that you to have set your own goals and objectives. I will focus on financial goals, but you should also regularly look to create and review family, health, career and other personal goals.
Paying off debt, starting a dollar cost average (DCA) savings plan (see DCA blog here) or even just putting something aside for that special holiday, a few infinity fiat currency units today (dollar, pounds, euros) can add up to a lot of scarce money (gold, silver, bitcoin) down the road.
If you do not know where you are headed, where do you start walking towards?
So to ensure you end up where you want to be - you will need to set specific financial goals.
What are financial goals?
They are the specific goals and objectives created by you when it comes to your personal finance. They are therefore unique to your personal and family situation, with defined targets for you and your family to achieve over the short, medium or long term.
Examples of financial goals include:
Saving $30k for a new car within 2 years
Having 6-month of emergency funding within 18 months
Earning an additional £1000 per month for a year
Paying off your mortgage 10 years early
Become financially free within the next 5 years
One thing you will notice is that the above financial goals are all SMART goals. The SMART acronym stands for:
Specific - This means that objectives must be clear, for example it must state that an individual needs to make more money, reduce waste, reduce environmental impact, increase sales etc.
Measurable - an individual must be able to measure whether they have met an objective. ie needs to specify an amount. For example, an individual may want a £10,000 increase or a 25% decrease.
Agreed - its important that all family members are aware of and agree with the family financial goals, this will give objectives a much better chance of succeeding.
Realistic - Objectives must be realistic. For example, earning and extra $10000 a month to start with on a basic of $1000 a month salary isn’t realistic, maybe starting with an extra $200 is more realistic, and you can build up to the $10000.
Time-bound - Objectives must have a time limit, for example 6 months or 1 year.
The goal of this blog was to introduce a few examples of what financial goals look like and secondly to introduce the SMART framework for defining goals. Look out over the next few weeks when we cover part 2, why financials goals are so important to set and finally part 3 - how best to set financial goals.
This blog is dedicated to “das fibonator”
DISCLAIMER:
This publication is general in nature and is not intended to constitute any professional advice or an offer or solicitation to buy or sell any financial or investment products. You should seek separate professional advice before taking any action in relation to the matters dealt with in this publication. Please also note our disclosure here
