How to Set Financial Goals without Freaking Out, that You’ll Actually Follow Through On

You’ve made it here, to this post on financial goal setting, which is farther than most. Congrats!

Financial goal setting is necessary and can transform into an exciting exercise if done correctly.  

Before going any further, you can also access our Goals course at no cost. 

As someone who spent his 20s living paycheck to paycheck and rolling over credit card balances from month to month, financial goal setting was one of the furthest things from my mind. It was something to be avoided.  

Now, in my 40s and financially successful, I love thinking about and projecting my financial future.  Let me tell you how I got here. These thoughts helped: 

• Financial goal setting can be easy.
• Financial goal setting creates the foundation for being financially stable later in life.
• When thinking about financial goal setting or feeling behind, that’s the time to document financial goals.

Actionable ways to set financial goals

There are three financial stages we all go through: protection, accumulation and distribution.  As you go through the questions below in each stage, write down what comes to mind. 

1. Protection
   1. Do you understand your cash flow?
   2. Do you keep a budget?
   3. Do you have six months worth of expenses saved in an emergency fund?
   4. Do you have auto, home, life, and disability insurance coverage?
   5. Do you have a will and power of attorney?  
   6. Do you have credit card and consumer debt paid off?

1. Accumulation
   1. What do you want to save money for?  (Annual vacations, a down payment for a home, kids’ education, retirement, etc.)
   2. How much will you need?
   3. When will you need it?  

1. Distribution
   1. How will you turn the money you saved into income that will last for as long as you need it?  
   2. What will your expenses be in retirement?
   3. How much income will you need?
   4. How long will you need it to last for?
   5. Do you have people or organizations you’d like to leave money to?

How to take action on your financial goals

Many of your goals may be a long way off. However, it’s important to plan for the long term.  To make planning easier, think about your goals in three year increments. Why?  Because if you can “win” the next three years, you’ll be in position to “win” the three years after that, and the three years after that.  You’ll be on your way to reaching all your goals.  Think about actions you can take now and over the next three years that will help you reach your goals.  

Making it real

Accountability is a beautiful thing, even though it may not feel like it at the time.  Find someone you can share your goals with such as a friend or family member.  When you communicate your goals with someone else, it increases the chances that you’ll achieve them.  

Now I’d like to hear from you.  What’s your most important goal?  Leave a comment below.

Want some additional help?  Ask me a question (I answer all of them) or jump on a coaching call!  

If you’re ready to take control of your financial life, check out our DIY Financial Plan course. 

We’ve got three free courses as well: Our Goals Course, Values Course, and our Get Out of Debt course. 

Connect with one of our Certified Partners to get any question answered. 

If you’d like help getting on the same page with your partner, check out our Same $ Page Course. 

If you’d like to help your kids get good with money, check out our Teaching Kids about Money course. 

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