What’s really important to you?
We live in a fast-paced world. If we don’t watch out, it’s easy to go through life without establishing long-term goals and values to guide us. Our society seems to stress the importance of short-term results–it’s easier to think about the upcoming weekend than it is your long-term future.
Good financial planning considers short-term, immediate, intermediate and long-term time frames. If you’ve been following our series of features over the past couple of issues, you’ve learned to inventory what you currently own and owe, take stock of your cash flow, and manage it in order to live comfortably in the present. Now is a good time to take a quick long-term look forward to see what’s really important to you over the next 3, 5, 10, 20, 30 years and more.
What personal, educational and business activities are you interested in participating in? How do you want to spend your personal time? Business time? Family time? How will you dress yourself? Who do you want to spend your time with? What kind of lifestyle do you want to live? What kind of car will you drive? Where will you live? Where do you want to travel? What do you want to see and experience? Whom do you want to meet? What do you want to accomplish? What would you like to do for your community?. What would you like to contribute to our world? Or receive from it?
Setting goals is a worthy and useful task. Goals help you hone your expectations and give you targets to work toward. Without short-term, intermediate and long-range goals, you might just wander through life and discover one day–only too late–that you didn’t really get a chance to accomplish what you wanted to.
Goal-setting doesn’t have to be difficult and can actually be a lot of fun. All you need is some private time to let your inner thoughts run free. Reflect on the values and things that are important to you. Decide which targets motivate and inspire you, then aim for them.
Your lifestyle goals are composed of personal and financial objectives. Personal goals include your ideas about family life, self-improvement, level of sports abilities, community activities, health and physical fitness, hobbies, special interests, recreation and travel.
Do you yearn to cook in an upscale custom kitchen? Do you like to drink designer coffee or premium wines? Own a vacation home in a warm and sunny luxury golf course resort? Do you like to wear trendy designer clothes? Drive collectible sports cars? Would you be sorry if you never took that dream trip? Do you need a larger home?
Your financial goals may include funding your children’s college education, becoming financially independent versus just getting by, or generating family wealth so your kids will have the time to make this a better world.
You will need to make and save financial resources to accomplish most of your goals. Your needs and desires provide the fuel for sound financial planning.
You may not generally think of the financial aspects of your life as being driven by your goals, but they are. Like many of us, you may find yourself reacting to financial situations more often than planning for them. This is precisely why formulating your financial goals NOW can make a world of difference for you. By setting goals, you can become more proactive in your life than reactive.
WHAT REALLY MATTERS FOR YOU
It’s important to put your goals in writing. If you don’t establish and solidify your own goals, other forces will influence you: peer pressure, intense advertising and merchandising, or just plain bad habits.
Begin looking now at your individual lifestyle and financial goals, as well as those of your family members and loved ones. Follow the accompanying checklist for developing your own “goal planner.” Make copies, fill one out yourself and give one to each family member, asking them to fill it out. Then schedule a family meeting to discuss and develop a set of goals for the family as a whole.
Take time to consider alternatives. You may redefine your goals once you understand your family’s and as you learn more about your financial position and the financial planning process.
If you or your partner or your children are not able to complete the goal planners the first time you try, don’t worry about it. You can also consider this to be a good way to introduce your children to personal finance.
It is a good idea to review your family and personal goals at least annually, such as in January or February. That way you can see what has been accomplished, and determine whether any goals need to be adjusted, dropped or added. Remember: Your financial planning is an ongoing lifelong process.
Once you have spent some time thinking and jotting down your goals, you may feel better about where you are in your life and where you want to go. Even if your goals are not yet as clearly defined as you would like, you have at least escaped the procrastination pitfall–the most common downfall in financial planning. And, you have probably started to identify a few items you would like to accomplish.
After you have some initial goals in place, you will be prepared to approach your financial planning in a simple, systematic manner using the Your Financial Partner six steps.
1. Review Your Goals
2. Gather Data
3. Analyze Your Situation
4. Develop Your Strategies
5. Implement Your Plan
6. Track and Monitor Your Progress
As you work through the different subject areas of comprehensive financial planning continue to ask yourself what’s important to you. If you keep your goals in focus, you will greatly improve your chance of successfully reaching and maintaining them.