Financial planning is all about goals. There are two islands: what you have and what you want. The bridge between the two is your personal finance budget. Getting to where you want to be requires vision, planning and discipline - the vision to know what you want, a plan to get there and the discipline to stick with your plan. Follow this guide to personal finance superstardom.
Setting goals and sticking to them is the key to personal finance success.
The difference between achieving goals and just staggering along as you have been often comes down to the tools you use along the way. The best tool you have at your disposal is quality software, such as Mint.com. Easy, intuitive and free, Mint.com offers a clear, crisp interface that charts and graphs your progress toward any goal, no matter how lofty.
"I want to be a millionaire by the time I'm 27" is a grownup's personal finance goal the way getting a pony for her birthday is a goal for a little girl. Goals and dreams are not the same things. Goals are actionable, attainable benchmarks that can be achieved through hard work, discipline and aggressive pursuit with the tools you currently have at your disposal. Paying off your student loans in five years, doubling your savings in 18 months or paying off your highest-interest credit card by the end of the year are all probably realistic, but none of them will come easy or without discipline and sacrifice.
Reach Small Goals Incrementally
When a writer outlines a screenplay, he or she doesn't set a goal of having a screenplay written in a year. The goal is having a chapter written in a month, 20 pages in a week. Goals must be small and near in order to be attained. When it comes to personal finance, break big goals down into small, manageable chunks. The easier they are to reach, the more of them you'll hit on time. The best way to hit a big, longterm goal is to hopscotch toward it on the backs of smaller, incremental benchmarks.
If you plan to take a vacation to Hawaii someday, chances are you'll die without ever seeing the Big Island. Goals need to have actionable, tangible time limits in order to be reached. If you want to take a vacation to Hawaii, set a deadline; say, 18 months. When you have an end date, you have a timeline, you have a countdown clock and something to work toward. Mint.com is designed to track and plan for goals -- as long as you set an end date to reach them.
Discipline and sacrifice is required to achieve financial goals.
Goals are the backbone of personal finance. The money you earn, spend and save must all be tailored around something you want in the future, like a car, or something you don't want, like a debt. Once goals are established, a plan to get there is easier to come up with, and the discipline needed to stay on track gets easier to maintain once smaller goals are achieved.
Go to Mint.com to sign up for a free account today. With a few clicks, you'll be one step closer to setting and and reaching your financial goals.