As you look to the future, you can see yourself saving for a purposeful retirement, giving generously to your favorite causes and supporting your family through life's milestone moments. To achieve those financial goals, it helps to draw up a solid plan.
By setting meaningful, concrete objectives, you can treat your money as a tool to help you attain what matters most to you, your loved ones and your community. It's a process that takes patience, persistence and a series of thoughtful steps.
Set SMART financial objectives
As you identify what you want to accomplish with your money, set goals that are
- Specific: Define each goal in detail. Ask yourself questions that begin with who, what, when, where, why and how. Your answers will help clarify what you hope to achieve.
- Measurable: Determine how you'll track your progress, in real numbers. Is success based on how much you deposit in a particular account? How often you take a certain action? How long it takes to reach a milestone? Markers along the way will ensure you're on the right path.
- Achievable: Set realistic goals. Don't aim to save $1,000 a month if your income and expenses can't accommodate it. Instead, pick an attainable monthly savings target—whether that's $500, $100 or $50. You could also set your savings goal as a percentage, such as 10% or 20% of your income; this can make it easier to stay the course as your income fluctuates.
- Relevant: Focus on the reasons your goals are important. Are you saving for an early retirement? Why? Do you have travel aspirations? Grandkids to care for? A post-retirement career you're eager to launch? If
goals are grounded in your values,you'll be more motivated to pursue them.
- Time-bound: Use target dates and timelines to track your progress. If you simply plan to save a certain amount by the time your child enters college, you might not hit your mark. Instead, set smaller savings goals as checkpoints along the way. Then, if your efforts don't keep pace with your plans, you have time to adjust.
Consider short-term vs. long-term financial goals
Not all financial goals require extended timelines. It's important to identify objectives you can check off within a few months or years, too. Examples of
Test for success
Make sure each of your financial goals passes your personal "acid test"—that it's truly valuable to you and you're willing to go the extra mile to make it happen. If you encounter hurdles along the way, you're more likely to clear them if you've already thought about what you'll do—or give up—to keep forging ahead.
A goal can be "Achievable" and still present some challenges. You'll want to anticipate obstacles and be ready to pivot. That may mean
Draw up your plan
SMART goals are a solid start. Next, you need a financial plan to map out the strategies to achieve them. There are a lot of perceptions around what it takes to make and
Put your plan in motion
Once you have a plan, it will help you take action. Let's say your goal is to sock away enough money in two years to cover living expenses for six months. You plan to get there by
Everyone hopes that their financial plan advances with minimal disruption, but stumbling blocks can arise - both within and beyond your control. For example, emergencies are outside of your control, but tapping your emergency fund for non-emergency spending is a block you can avoid. To help you avoid and recover from stumbling blocks, your financial plan could include establishing separate accounts based on specific financial goals or expenses.
And, of course, everyone faces setbacks sometimes, so don't view them as a reason to give up on your goals. Instead, see them as an opportunity to refine your approach.
Keep your emotions in check
Regardless of how well you've prepared, life will occasionally trip up your financial plans. Emotions may run high. That's natural. But strive to manage those reactions. Acknowledge any
Find your source of support
As you set SMART goals and draw up plans to reach them, consider all available resources. Connect with a