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How to Set Financial Goals

How to Set Financial Goals,Regardless of How Much Debt You Have

Having any debt creates a financial burden that makes planning for a future expense or long-term goal difficult. It may feel like a hopeless situation, but debt doesn’t have to derail your plans for the future or prevent you from achieving financial success.

In the journey to a debt-free life, the best way to ensure you graduate from a debt settlement program is to set financial goals that keep you motivated and on course. Your goals should be measurable, attainable, realistic, and specific.

Although it doesn’t matter what the goal is — buying a new house, going on vacation, taking the family out for a special occasion — the steps to planning and executing effective financial goal-setting strategies are always the same.

1. Understand your motivation.

Getting debt-free is the ultimate goal, and should be the primary motivation to pursue any debt-settlement program. But beyond that, it’s essential to understand why you are setting specific goals.

Do you want to do more with your newfound free time? Do you want to make financially secure purchases for a better quality of life? Do you want to be able to help friends and family more? Do you want to ensure that your children have a better future?

The motivation for goals is different for each of us, so think about what’s important to you and start from there. Once you have a list in mind, you can begin to get specific in your planning.

For example, suppose your motivation is to provide more financial security for your children’s future. In that case, a financial goal could be to start a 529 plan and contribute a certain amount each month.

On the other hand, if your motivation is to have more free time without constantly working to keep debt in check, your financial goal could be planning a holiday getaway to help you relax and recharge.

It is also important to note that your motivation doesn’t have to be a grand gesture or a large purchase. It can also be something simpler, such as building an emergency fund, redecorating a room in your home, or taking a course to learn something new.

2. Break it down into manageable milestones.

Profound hardships can ruin our perspective and make it challenging to create achievable financial goals. To make it easier, break your large goal into smaller milestones, similar to how your current debt settlement program works.

For example, if your goal is to buy a house in five years, you can assign yourself mini-goals, such as increasing your income by 10%, building an emergency fund with three months’ worth of salary, paying off all of your debts, and raising your credit score by a certain number.

By having smaller goals to focus on, you can start to tackle them one at a time while still keeping the end goal in sight.

3. Break it down into manageable milestones.

Profound hardships can ruin our perspective and make it challenging to create achievable financial goals. To make it easier, break your large goal into smaller milestones, similar to how your current debt settlement program works.

For example, if your goal is to buy a house in five years, you can assign yourself mini-goals, such as increasing your income by 10%, building an emergency fund with three months’ worth of salary, paying off all of your debts, and raising your credit score by a certain number.

Tips to Keep Financial Goals on Track

Chances are you’ve spent a lot of time being frustrated, scared, anxious, or overwhelmed because of your debt. But don’t let these emotions derail your financial goals. Here are some tips to help keep you on track.

Use visualization techniques.

Visualization techniques are a common practice among the most successful people, and you can use the practice to meet your financial goals. There are many ways to go about this, but the most common include:

  • Create a vision board with images of the places you want to visit or the big purchase you want to make.
  • Write down your goals and post them in a visible place (bathroom mirror, fridge, front door) so you can be reminded of your motivation daily.
  • Meditate while speaking a personal mantra specifically related to your financial goals. For example, “I will be in France next year” or “I will buy my dream house in five years.”

Include others in your goal.

Often, talking about something is a great way to build the motivation necessary to carry a goal through to completion. Sharing your goals with friends and family is a great way to gain support, advice, and even constructive criticism that can help you stay on track.

Reward yourself.

Having rewards for achieving milestones along the way will help keep you excited to accomplish each goal. Every goal has a different reward system, and the best rewards usually relate directly to your goal. 

For example, if your goal is to buy a new house, consider purchasing a small piece of home decor every time you hit a milestone. Likewise, if your goal is to go on vacation after graduating from a debt settlement program, at each milestone consider purchasing a piece of clothing you’ll need for the trip.

Reach Your Financial Goals With the Right Motivation

Setting and achieving financial goals can be daunting, but with the right motivation and persistence, it’s possible to make big strides. Keep your end goal in sight, and take actionable steps towards achieving it one day at a time.

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