This is a guest post by Mark over at @ Financing Your Family, a newer blog that focuses on helping readers to be “smarter with their money, closer to their family, and willing to work towards worthwhile goals”. Lend him some support by checking out his site.
When I talk with people about there financial goals, there is one thing that tips me off as to whether or not they will be successful or not, and that is how they describe their goals. Some examples of goals I’ve heard are: “I want to be rich someday,” “I want to have kids,” and “I don’t want to work for a large company.” These are all financial goals to be sure, but when people tell me that these are their goals, I usually think that they just don’t really care about their lifestyle that much.
You see, all of the goals I just named are what I call, No-thought goals. These are the hasty kinds of goals that cause people to start businesses in areas that can’t support that type of business. They strip away any semblance of plan by being short and edgy. I can’t call them bad goals because they are all good things to the person saying them. They are just poorly worded.
So, let’s break apart one of those goals, “I want to be rich someday” for example:
- How is rich defined? In dollars? $1,000,000, or $1,000,000,000? In possessions?
- When is someday? 5 years? 10 years? retirement?
- Who is I? If it’s just you, do you not want family? Do you judge wealth by family?
All of these questions (11 total in 10 seconds typing) need to be answered by the goal statement. So put some thought into it. A revamped goal statement for “I want to be rich someday” could be: “Twenty years from now, my goal is to be earning more than $80,000 a year, with a combined total net worth in excess of 4.2 million dollars, so that my family can live the life they deserve.”
The keys to making your goals good ones are:
- Thought– take some time to consider your wants and needs.
- Who– who will it impact? These people should be included in the goal-setting process too.
- What‘s the time frame? Put a deadline on your goal.
- Be specific, words have many definitions, this helps narrow down your meaning.
The goal process is one that is overlooked by so many people in America, but good goals are what keep you from debt, from foolish spending, and from poor investments.