The start of a new year is a great time to set financial goals of any type. Enlist the help of your family members, and make financial goal planning a family project.
When should you start financial goal setting?
It’s never too early to start planning for financial goals. At the same time, if you’ve neglected to plan in the past, there’s no time like the present to start.
Why are setting financial goals important?
• It sets importance on reaching a goal.
• Demonstrates a good example for kids regarding money management.
• Helps your family have an overall plan for large purchases and to achieve your dreams.
How do you get started setting financial goals?
Experts suggest the following steps:
1. Determine short-term, mid-term, and long-term goals. According to this site,
Short-term goals can typically be achieved within 2 years. Example: A family vacation.
Mid-term goals might take 2-5 years to reach. Example: Buying a house.
Long-term goals can take as long as 5 or more years to reach. Example: Saving for your children’s college education.
2. Complete a worksheet to determine how to meet your specific goals. This step helps you see how much you need to save and for how long in order to reach your goal.
3. Discuss with your family how you can achieve your goals. Whether it’s ways to earn more or spend less, or a combination of both, enlisting the help of all family members is important.
Check out this previous post regarding money matters and kids for earning and saving ideas: http://blog.familywize.org/2014/05/money-matters-for-kids.html.
What are key elements of achieving financial goals?
• Write it down. Committing a goal to paper helps you see the actual goal as well as ways to achieve it clearly.
• Picture it. A photograph or illustration of an end goal – a specific vacation destination, a new car, or receiving a college diploma – helps your entire family visualize the goal, which makes it more realistic and attainable.
• Enlist the help of your family. Encourage kids to come up with their own ideas for saving or earning to help reach family goals.
• Re-evaluate. Take time to reassess your goals, evaluate how much you’ve saved or earned.
• Track progress. Whether you use a chalkboard or a computerized chart, have some way to keep your family informed of progress.
When setting financial goals, remember:
• Be realistic. It will be frustrating for your entire family if you set a goal that’s unrealistic.
• Be flexible. Unexpected expenses occur with the best plans.
• Keep your eyes on the end goal.
• Setbacks do occur. Don’t let them discourage you.
Where can you learn more?
Check out sites such as www.financialplan.about.com and www.dummies.com/how-to for more information on setting and realizing financial goals.
In some cases, families choose to enlist the help of a financial planner to assist with their goal-planning needs. As is the case when you’re using the services of any professional, it’s always advisable to check credentials and references when considering a financial planner.
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