We’ve covered many topics in our BrightDime Basics series: what makes up a Balance Sheet, the calculation of Net Worth and the components of Budgeting. Last week we covered how creating a budget and setting financial goals are an important step to keeping you on track for the things you want in life. If you have financial goals you want to accomplish like paying off debt or saving for a home, putting together a plan with short and long term goals will help you achieve them.
Goal setting is simply deciding what you want to accomplish and creating an action plan to achieve it. It’s best to be as specific as possible, prioritize goals based on their importance to you, and then consider the resources (time, money) you will need to accomplish each. Different financial goals will have different time frames. Some may be short term; it might take a week, a month, or a year to build an emergency fund or save for new furniture. Others may take longer (a medium term goal) like saving for the down payment on a house, buying a car or paying off a specific debt. Long term goals like saving for retirement, saving for a child’s college fund or paying off a mortgage take many years. You have to find motivation to make it to the end. So picture yourself on your new sofa, calmly paying an unexpected bill out of your emergency fund, in your new home, not stressed by your financial future because you’ve paid off some debts and are saving for retirement. Ready to set your goals? Read more here for our recommended steps to setting financial goals.
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