What are your financial goals? Perhaps you have recently faced a financial crisis and are ready to ensure it doesn’t happen again. When the time comes for an emergency, you want to be able to handle it with ease or at least with the best possible outcome.

When you’re just coming out of a financially challenging situation, such as an expected medical leave from work or divorce, it’s easy to worry. However, with a few tips, it can also be possible (and easy) to restructure your financial future.

The Importance of Goals in Financial Recovery

Goals are essential. How will you know when you’ve reached a destination if you do not have a goal in mind? In the financial world, goals are a beacon and guiding light, helping you to know where you need to go. They can help you with making spending and saving decisions. They can also help you to think about the future and put a plan in place to buy something valuable to you. Without goals, you’re simply moving through the process. With goals, you may be able to retire early.

Types of Financial Goals

There are several types of goals, all of which are important to you:

• Short-term goals: You set to accomplish these within a year. They tend to be smaller and specific, such as making a specific purchase or reaching an emergency savings goal.
• Mid-term goals: These take longer, usually about five years to complete. They could include paying off specific debts, for example, or saving for a home down payment.
• Long-term goals: These take more than five years to complete and often are much more extensive, such as paying off all of your debt, paying off the mortgage, or saving to a specific goal point.

Setting SMART Financial Goals

When setting SMART goals, ensure they meet the following criteria:

• Specific: Clearly define your goals with precise details of what you aim to achieve.
• Measurable: Utilize numerical benchmarks to track your progress and confirm that you are advancing towards your goals.
• Attainable: Set achievable goals within your established time frame and resource constraints.
• Realistic: Select feasible and manageable goals; overly ambitious goals can lead to frustration.
• Time-Bound: Assign a specific deadline to your goals to determine when you should achieve them.

Creating a Plan to Achieve Your Goals

Once you have a SMART goal, you must create a plan for achieving it. Let’s say, for example, you aim to save $1,000 within the next four months. You know, then, that you need to save $250 a month. With that in mind, you can determine where those funds will come from. Here are some steps:

• Do you need to increase your income?
• Will you need to reduce your expenses?
• Can you trim away any recreational costs right now?

Determine what your plan is and start working towards it. Having a plan means that, every day, you are taking steps to ensure you are on track.

Prioritizing and Adjusting Your Goals

One of the critical things to remember about goals in financial management is that you have to adjust them over time as your life changes. For example, you may have a chart outlining specific goals to reach over time. What if your income changes, though? If your income increases, you can adjust your goal to match that. If your income falls, you may have to adjust until you can get back on track.

Tools and Resources

Numerous tools are available today to help you build solid financial goals and plans. However, there is no right or wrong answer to how to make this happen. Choose what works for you:

• Use pen and paper if you want something simple.
• Use an app on your phone to help track your goals.
• Select one of the various tools available from financial institutions nationwide to help you.

Seeking Professional Advice

Working with a professional could help you to establish your goals and work towards achieving them. They can also offer insight into new strategies that may be a better fit for you. A professional will also tell you when you need to make substantial changes to avoid financial pitfalls in the future.

Takeaways

A new financial goal can seem like a daunting task. Yet, it can also put you on the path to building the financial wealth you desire and deserve. Make today the first day of that process. Work to determine what financial goals you wish to achieve and then develop a plan to make that possible.