Achieving personal financial satisfaction starts with clear financial goals. Developing Personal Financial Goals
Since the United States is one of the richest countries in the world, it is difficult to understand why so many Americans have money problems. The answer seems to be the result of two main factors. The first is poor planning and weak money management habits in areas such as spending and the use of credit. The other factor is extensive advertising, selling efforts, and product availability. Achieving personal financial satisfaction starts with clear financial goals. TYPES OF FINANCIAL GOALS
Two factors commonly influence your financial aspirations for the future. The first is the time frame in which you would like to achieve your goals. The second is the type of financial need that drives your goals. TIMING OF GOALS What would you like to do tomorrow? Believe it or not, that question involves goal setting. Short-term goals are goals to be achieved within the next year or so, such as saving for a vacation or paying off small debts. Intermediate goals have a time frame of two to five years. Long-term goals involve financial plans that are more than five years off, such as retirement savings, money for children’s college educations, or the purchase of a vacation home.Long-term goals should be planned in coordination with short-term and intermediate ones. Setting and achieving short-term goals is the basis for achieving long-term goals. For example, saving for a down payment to buy a house is a short-term goal that can be a foundation for a long-term goal: owning your own home.
| Goal frequency is another ingredient in the financial planning process. Some goals, such as vacations or money for gifts, may be set annually. Other goals, such as a college education, a car, or a house, occur less frequently. GOAL-SETTING GUIDELINES FROM CNN/MONEYWhat are your top three financial objectives? Most people, when asked that question, answer with general goals,...
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