Financial Goals are often tough for small business owners to set. When people actually start thinking about money and finally realise that they need to do something with their money, they normally set the goal of having financing freedom. Ask any young parent or someone who has just started a career and you will surely get this response.
Financial Freedom as a goal
We all want financial freedom- personal finance’s ultimate goal. Isn’t it? It is the ultimate goal because it ensures that by achieving financial freedom we will have enough money to cover every imaginable expense to be incurred from this moment till we say goodbye to this world.
It is really a loudest and most ambitious goal we set for ourselves and I’ll explain why you are never going to achieve it.
#1. Vague Goals vs Specific Goals
Just setting up the goal of having financial freedom is a vague goal. Achieving financial freedom is really the loudest goal you can have a real chance of not achieving it.
You will probably not achieve it because it is a vague goal- something which is not structured around the details.
#2. It simply lacks the SMARTness
When it comes to setting goals- any goals, becoming specific to the last details is what works best.
Until you do not put an effort to clearly and specifically define your money goals, you are going to settle for less because you will fail to decide a clear course of action.
For example, on the broadest side, your goal can be to achieve financial freedom, however, if you can further break it down to the specifics, you will get clearer on how to achieve it. Being clear on your goals and making them specific takes out the temptation for finding a foolish way to achieve it.
#3. Success is specific
Setting up vague goals is often done by people who hardly achieve any specific thing in life. Research on psychology has proven time and again that successful people are best at defining their goals in greater details.
Successful people don’t simply settle on something which is not clear, vague and uncertain. They make sure that they define their goals in a way where they can clearly visualise the end result.
It is really foolish to say “ I want to be financially free” however, if you can make it more specific, you start to lay down a clear path to achieve it, if not in its entirety then to some extent- just by being more specific about your goal.
How can you set up specific goals?
So how you are going to set up money goals which are achievable and realistic enough?
Here is a step by step way to do it
#1. Write down the goals- vague goals
Start with your most ambitious goal. It could be achieving complete financial freedom or it can be living a debt free life.
Whatever your goal is, as vague as it can be, first write it down.
Let’s start with the goal of achieving financial freedom- having enough money to live a comfortable and stress-free life.
#2. Decide on how you will know that you have achieved your goal
Setting up and writing your goals is the first step, however, to get more specific about them, second step is to visualise the moment where you think you have achieved your goal.
Simply put, how will you know that you have achieved your goal of having financial freedom?
You can say that you will be financially free when you will be debt-free or someone else, it can be finding a job or doing a business which provides enough money to spend and save. For some, it could be to retire early and go on a vacation.
Finding out your wow moment- the moment where you truly believe that you have achieved your goal is something you should clearly focus on.
#3. Go back and re-write the goal
Now that you have made your choice of setting up your financial goal and also visualised the moment of success, next step it to re-write your goal.
Your first goal may be something like this …
“I want to achieve financial freedom”
However, after visualising your success moment, it needs a revision- it could be re-written as:
“I want to be debt free by December 2017”
Compare both the goals, which one you believe is more specific? Second one? Right…
Go ahead and re-write your goal and once you finished writing it, read on…
#4. Finding out positives and negatives
Successful people are always good at spotting obstacles in their way and they plan for it. They make strategies to deal with all the obstacles they feel they will face as they progress.
Before making an effort to achieve your financial goals, finding out negatives and positives are as important as setting up the goal itself.
List down two obstacles you believe you may face achieving your financial goal. If your goal is to pay off your debt by Dec 31, 2017, find out what two things will hurt you most to achieve this goal.
It could be that you may lose your job next year and you will not have enough money to pay off your debt as planned.
It could that you can face any health emergency and without waiting for NHS to treat you, you may have to go for private medical treatment.
There are endless possibilities of obstacles you may face in achieving your goal but finding out and settling on two obstacles which you truly believe that will likely happen, write them down and plan how you are going to deal with them and at the same time pay off your debt also.
You may also have to write down two positive things you believe will happen if you pay off your debt.
Writing down positive outcomes of your goals gives you a personal reason to make an all-out effort to achieve your goals.
Remember, the first pole to cross on road to financial freedom is not about money- it is all about setting up specific goals which can motivate you enough to achieve your money goals.
Question: What specific money goal you can set today? What obstacles do you think you can face in achieving your money goal? Let’s discuss it in the comments section.