Table of Contents
Chapter 1: How to Determine Your Financial Goals
Chapter 2: Setting Priorities to Reach Your Financial Goals
Chapter 3: Short Term Goals vs. Long Term Goals
Chapter 4: Focus on Feasible Financial Planning Goals
Chapter 5: Review Your Financial Goals Periodically
Chapter 6: Tracking Your Financial Planning Progress
Developing goals is not a task that can be successfully completed during your half hour break at work. A lot of thought and analysis needs to go into the process. Remember that these goals, when achieved, will shape your future.
It is very important to give serious thought and analyze in detail the various things that you would like to achieve. However, it is highly unlikely that you can achieve every single thing that you have ever wanted to in your life.
Prioritizing helps in pruning the list of goals you have set for yourself. But when you prioritize and identify top goals, you should also pay due attention to the feasibility of the goals. For example, a luxury condo in Manhattan is a reasonable and attainable target for a senior executive of a large company but not for an average income family.
The viability and feasibility of your goals must be assessed in terms of your current and future earning capacity.
Setting Practical and Reasonable Goals
Practicality also plays a huge part in determining whether goals are attainable and reasonable. Saving for a trip to the Moon is not practical for anyone above the age of 5. And it is not just the difficulty of saving enough to build a spaceship that makes this impractical. There are so many other factors involved that make the plan impossible.
Reasonable goals are those that will give you happiness, security, a comfortable lifestyle and peace of mind when they are attained. Extravagant desires are fine, as long as they are confined to your ‘desirables’ list and do not encroach on the top priority list.
Allowing unreasonable, difficult to attain or impractical goals to take first priority means that you are pulling funds out that could otherwise be used to ensure the basic requirements of later life.
What then constitute reasonable goals? Different people have different priorities. But goals like owning a home, higher education, setting up an emergency fund, securing medical care for the future, debt reduction etc are all goals that are reasonable, practical and can actually improve your quality of your life.
Next Chapter: Review Your Financial Goals Periodically