How to Set Financial Goals

set financial goals

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You might wonder… what’s the difference between a goal and a financial goal?

What Is a Financial Goal?

A financial goal is a goal that requires both a certain amount of money, and a certain amount of time for its accomplishment. Think about those things in life that are most important to you… what you would like to do, and what you would like to have.

Some examples are: a wedding for your daughter, an addition to your home, replacing your car next year, college for your son, starting a new business, and, later in life, living expenses in retirement, travel, and healthcare. You’ll notice that each of these goals takes place at a definite time in the future, and each requires money, and, in some cases, a significant amount.

Plan Around Your Life Goals

These life goals, your dreams, become the basis of your personalized financial plan.

Once we have your goals, we discuss your risk tolerance…how you feel about risk, how much can you accept and still sleep at night. We then discuss your other cash flow needs, your current income and savings, and your future anticipated income, perhaps from a pension or social security.

Now we have all the ingredients to build you a personalized financial plan that will most effectively help you meet your dreams.

What Financial Goals to Focus On

If your dreams have been big, you may not be able to afford all of those goals. The financial planning process will help you prioritize your goals so you can either eliminate, or scale-back the less important ones. It will also help you “think outside the box” about how you can accumulate the wealth needed to accomplish the most important ones.