Tips for Creating Financial Goals

Oct 7, 2021 11:06:24 AM / by Jason Shaw

finding financial freedomSetting financial goals is an essential step toward achieving financial stability and security. Creating achievable financial goals requires deliberate planning, discipline, and a clear understanding of your financial situation. This article provides tips on how to set financial goals that are realistic, achievable, and sustainable.

Assess Your Current Financial Situation

The first step in setting financial goals is to assess your current financial situation. This involves taking a detailed look at your income, expenses, assets, and liabilities. It's important to know your net worth, debt-to-income ratio, and your spending habits. This information will help you identify areas where you need to make changes to achieve your financial goals.

Identify Your Financial Priorities

Once you have a clear understanding of your current financial situation, the next step is to identify your financial priorities. These could include saving for retirement, paying off debt, saving for a down payment on a house, or starting a business. Prioritizing your financial goals will help you focus your efforts and resources on achieving them.

Set SMART Financial Goals

SMART financial goals are Specific, Measurable, Achievable, Relevant, and Time-bound. When setting financial goals, make sure they meet these criteria. For example, instead of setting a goal to "save more money," set a specific goal to "save $500 each month for the next 12 months." This goal is measurable, achievable, relevant to your financial priorities, and time-bound.

Break Down Long-Term Goals into Short-Term Goals

Long-term financial goals can seem overwhelming but breaking them down into short-term goals can make them more achievable. For example, if your long-term goal is to save $50,000 for a down payment on a house, break it down into smaller, achievable goals, such as saving $5,000 each year for the next 10 years.

Create a Budget

Creating a budget is an essential part of achieving financial goals. A budget helps you track your income and expenses, identify areas where you can cut back on spending, and prioritize your spending to achieve your financial goals. Use budgeting tools like spreadsheets or apps to create and track your budget.

Track Your Progress

Tracking your progress towards your financial goals is important to stay motivated and adjust if necessary. Use tools like financial apps or spreadsheets to track your progress toward your goals. Celebrate your small victories along the way to stay motivated.

Adjust as Needed

As your financial situation changes, it's important to adjust your financial goals. For example, if you get a raise, you may want to increase your savings goals. If you have unexpected expenses, you may need to adjust your budget to accommodate them. Flexibility and adaptability are important when setting and achieving financial goals.

Seek Professional Help

While it is possible to manage your finances on your own, not everyone has the expertise or time to do so effectively. Hiring a financial advisor can be a wise decision for those who need help navigating the complexities of the financial world. An advisor will work with you to create a personalized plan that aligns with your financial goals. However, it is important to note that an advisor will make recommendations, not decisions, and ultimately it is up to you to decide what is best for your financial situation.

Investing is a crucial component of financial planning, regardless of your age or financial stage. A financial advisor can help you create a realistic plan that aligns with your long-term financial security goals. Typically, advisors will meet with clients on an annual basis, but certain life events may require immediate attention. These include changes in your financial goals or time horizons, marriage, divorce, having a child, experiencing health issues, significant changes in income, and changes in economic or tax laws that affect you. By working with a financial advisor, you can feel more confident in your financial decisions and make progress toward your financial goals.

Setting financial goals is an important step toward achieving financial stability and security. By assessing your current financial situation, identifying your priorities, and setting SMART goals, you can create a financial plan that is achievable and sustainable. Remember to track your progress, adjust as needed, and seek professional help if necessary. With discipline and dedication, you can achieve your financial goals and create a better financial future for yourself.

Boelman Shaw

Boelman Shaw specializes in tax-efficient investing because every financial decision has tax implications. Our financial advisors and tax professionals coordinate their efforts to ensure that your investment strategy does not cost you more in taxes. A lot of advisors can grow your investments and keep up with the market, but if their strategies do not consider those tax implications, you could be losing money in both the short and long term.

Tax and accounting services provided through Boelman Shaw & Company, LLC. Advisory services provided through BSC Capital Partners, LLC a state of Iowa registered investment advisor.

Topics: Financial Planning, Investments

Written by Jason Shaw