Setting financial goals plays a very important role in personal finance management. This is probably the first step a family should take while starting to manage their money in a conscious and organized manner. Similar to prioritizing your needs while creating a household budget, goal planning also requires some thorough thinking and analysis. If you want your goals to become something more than just a bunch of ideas put down to pencil and paper, then you should exert self-discipline and follow these simple rules while defining your goals:
- Be clear and specific: don't confuse your desires with your goals. A personal goal is bound to success if it's formulated clearly and concisely and doesn't describe the end result in overly broad terms. Setting vague goals will serve you no purpose.
- Be realistic: it's important to set goals that you can actually achieve. Of course we all have desires and ambitions, but to actually reach your financial goals you'll have to consider a lot of key factors, like your family budget, income vs. expense trends, future planning, etc. Pie-in-the-sky goals will get you nowhere.
- Set a timeline and measure progress: it's easier to commit yourself to your goal and direct all your energy to achieving it when time is pressing. Having set milestones will keep you well motivated and focused on the end result. Also don't forget to check your progress and evaluate the intermediary data.
Our personal finance software offers the right online money management tools to help you set financial goals and monitor your progress. The Goals feature allows you to create simple or more complex goals and set aside money by means of effective budget planning and informed spending decisions. You can build a strategy to save money that's right for you and your family and stick to your plan. For simple goals (for example, buying a new bicycle for your kid or saving for the down payment on a home) you may not need to divide the goal itself into smaller items. However when you set more complex goals (for example, saving for a dream vacation in some exotic place) you may want to break the individual goal into smaller parts like:
|1||Flight tickets||1,500 USD|
|2||Hotel fare||1,100 USD|
|4||Sightseeing & tours||284 USD|
Having your goal divided into smaller pieces, you can take it one item at a time and work towards the larger goal. The benefits of such an approach is that you can reach the sub-goals faster and thus the main goal becomes more tangible and within the reach.
Personal finance management is not all about budgeting and expense tracking. It also includes setting individual financial goals and achieving them with InEx Finance online money management software. And remember: the harder the battle, the sweeter the victory.