How to Make Financial Planning Goals

How do successful business people make things happen? How do successful athletes make things happen? How to successful leaders make things happen? The answer is goal setting.



I could go on and on with goal setting in various occupations, but hopefully I made the point. Goals determine what you consider success.

This concept is no different when it comes to personal finance. Setting realistic financial planning goals will help you stay on track for where you want to go or how successful you want to be.

Becky (my wife) and I set financial goals at the beginning of each year and review our progress from the previous year’s goals. Over the past five years, we have discovered that when we have written our goals down, we either have accomplished or succeeded them.

So how do we do it? Since I am an ultra math nerd, we have the benefit of my various calculations and scenarios, however, you don’t need a MBA (Masters in Business) to come up with solid financial planning goals.

First of all, your goals must be SMART.

  • Specific
  • Measurable
  • Attainable
  • Realistic
  • Timely or have target dates

The next step is to assess your situation; here is what we do in our household:

  1. Review the “Major Components of a Healthy Financial Plan” worksheet: This worksheet shows the various items that are essential for a successful financial plan. It has the task, the action needed, and a date. Don’t feel that you have to accomplish everything on this list at once, it is merely a “checklist.” For example, we have a will, but it is getting time for us have it revised. Therefore, we will simply write that we need to revise our will and a date for when we think we can reasonably get this done.
  2. What are your “large purchase” wants or needs: If you are married, together, over a nice bottle of wine, when the kids are in bed, discuss what are the “big-ticket” items you would like to purchase for the next one to five years.
  3. Make conservative financial projections. Based on your budget, debt balances (including your mortgage), savings accounts, and investments; project where your accounts will be after each year for the next five years. The math “nerd” will need to do this analysis. Keep your projections conservative; for investment accounts, use an 8-10% average return if you’re diversified in the stock market.
  4. Compare “large purchase” wants and needs versus conservative financial projections. Do your wants or needs seem possible? If not, then you will need to make adjustments to your monthly cash flow plan.
  5. Write down your goals. Once you have gone through the first four steps, you can write your SMART goals. For married couples, this process can strengthen your marriage. A couple who agrees on their goals and aligns their dreams can be an unstoppable force.
  6. Wrap up with prayer. Pray together, and seek strength from GOD to help you reach your financial goals. If you do it with the right spirit and manage his resources well, he is more likely to give you more to manage.

The late Zig Ziglar said, “If you aim at nothing, you will hit it every time.” Don’t manage money without knowing where you want it to go; that is a great way to go broke.

Question: Do you have financial planning goals? If so, have you written them down?

photo credit: tgbarrett via photopin cc

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I provide one on one financial planning, counseling, and coaching coaching services that will help you develop and implement a plan specific to your unique situation. This may include learning how to create a cash flow plan, save for emergencies and purchases, reduce debt, and build wealth. In addition, I can walk with you through a crisis, such as dealing with harassing debt collectors, bankruptcy, and foreclosure.

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