How to Set and Reach Realistic Financial Goals
There’s a difference between a financial plan and what you’d do if you won the lottery. You don’t want to set financial goals that you can accomplish in a day, but it’s easy to get disappointed in slow results if you set your sights too high.
If you are just starting to set financial goals or want to readjust your plan, here are some tips for setting and reaching your goals.
Set Short and Long Term Goals
Realistic financial goals address short- and long-term needs. An example of a realistic short-term goal might be to create a monthly budget or start an emergency fund.
Long-term goals would include paying off debt or reaching a certain amount in your retirement fund.
Most of the time, short-term goals will contribute to long-term success. Every month that you can add a hundred dollars to your emergency fund gets you a step closer to saving six months’ worth of income.
Focus on Goals in Different Areas
If you’re only focused on paying off debt, you lose an opportunity to build wealth for your future. If your only goal is to create an emergency fund, you’ll miss out on the return ability that investments offer. When we work with new clients, we help them set goals in four areas: Live, Give, Grow, and Owe.
Live: How Much Is Enough?
The foundation for a successful financial life is understanding how much is coming in and going out each month. What do you need to pay your bills each month? What do you need to protect and provide for your family?
Here is where many short-term goals will arise. Do you want to send your child to a private school next year and need to budget for tuition? Is there an opportunity to significantly boost your emergency fund each month? These goals identify what you have been given and help you steward your monthly financial obligations well.
Give: How Can I Bless Others?
We believe that the love of money is the root of all evil, and it’s easy to view your financial plan as a way for “more, more, more.” Implementing an intentional giving strategy helps clients remember that every good and perfect gift comes from above. It also helps them connect with the missions and values that matter most to them.
Suppose you have a ministry or community organization that you are passionate about. In that case, your giving strategy is a great way to bless the work they do without sacrificing the chance to reach your financial goals.
Owe: How Can I Remove Obstacles?
We like to tell our clients that “debt isn’t condemned, but it does have consequences.” Any debt you have will prevent you from using the same money for another purpose.
Creating financial goals to pay off what you owe allows you to live unhindered by debt. We help clients create monthly and quarterly plans to eliminate debt, as well as a long-term strategy that will have them completely debt-free before they retire.
Grow: How Can I Create Future Wealth?
Growing your margin is the best way to meet your long-term financial goals. If you have the right strategy, buying an investment property or leaving intentional wealth for your grandchildren isn’t just a “winning the lottery” goal. Investing your money is a powerful way to build upon what you’ve earned.
OneAscent offers a values-aligned investing approach, allowing investors to be intentional about what areas of industry they profit from and avoid. With values-aligned investing, we can help you build an investment strategy around what matters most to you while still seeing the financial returns that will help you reach these goals.
Have an Accountability Team
It’s easier to reach your goals if you have a support system in place to help you reach benchmarks and celebrate your wins.
This can be a spouse or a friend, but a financial advisor will be well-equipped to help you navigate through a personal financial strategy. At OneAscent, we desire to build relationships beyond your finances to serve you best.
If you would like to talk about what financial goals fit with your desire for your life and legacy, we’d love to talk! Reach out to us today for a no-obligation consultation.