Assets may include cash or cash equivalents, such as checking and savings accounts; personal property, including equity in a home and/or a car; and invested assets, including stocks, bonds, and pensions. Liabilities might include current bills and debts such as car loans, home loans, medical debt, credit card debt, or student loans. See How to Get Out of Debt.
A positive net worth means that you have more assets than liabilities, a negative net worth means the opposite.
You may find that your short-, intermediate-, and long-term goals build upon each other — saving $100 a month, for example, toward a house fund may lead toward your long-term goal of purchasing a home.
Specific goals can be clearly articulated. A vague goal like “be financially independent” makes it impossible to succeed or fail. Have a concise and precise goal that you can turn into a short statement. Measurable goals have some quantitative dimension to them, such as “Get my credit score to 750” or “Have $12,000 in emergency savings”. Without assigning a value to a goal, it’s also difficult to know if you’re making progress. Attainable goals are reality-based. Don’t make a goal that you cannot realistically attain: this will only discourage you from having a plan at all. Rewarding (also known as Relevant) goals feel good once you achieve them. There should be a positive feedback loop where you finish a goal and then want to finish more. Time-based goals are not open-ended but have deadlines and milestones that you can fail or succeed at. Remember that plans are not set in stone and they can change as you have new information: if you fail at a certain milestone on the way to a goal, adjust that expectation and give it a new deadline.
Specific goals can be clearly articulated. A vague goal like “be financially independent” makes it impossible to succeed or fail. Have a concise and precise goal that you can turn into a short statement. Measurable goals have some quantitative dimension to them, such as “Get my credit score to 750” or “Have $12,000 in emergency savings”. Without assigning a value to a goal, it’s also difficult to know if you’re making progress. Attainable goals are reality-based. Don’t make a goal that you cannot realistically attain: this will only discourage you from having a plan at all. Rewarding (also known as Relevant) goals feel good once you achieve them. There should be a positive feedback loop where you finish a goal and then want to finish more. Time-based goals are not open-ended but have deadlines and milestones that you can fail or succeed at. Remember that plans are not set in stone and they can change as you have new information: if you fail at a certain milestone on the way to a goal, adjust that expectation and give it a new deadline.
Specific goals can be clearly articulated. A vague goal like “be financially independent” makes it impossible to succeed or fail. Have a concise and precise goal that you can turn into a short statement. Measurable goals have some quantitative dimension to them, such as “Get my credit score to 750” or “Have $12,000 in emergency savings”. Without assigning a value to a goal, it’s also difficult to know if you’re making progress. Attainable goals are reality-based. Don’t make a goal that you cannot realistically attain: this will only discourage you from having a plan at all. Rewarding (also known as Relevant) goals feel good once you achieve them. There should be a positive feedback loop where you finish a goal and then want to finish more. Time-based goals are not open-ended but have deadlines and milestones that you can fail or succeed at. Remember that plans are not set in stone and they can change as you have new information: if you fail at a certain milestone on the way to a goal, adjust that expectation and give it a new deadline.
Specific goals can be clearly articulated. A vague goal like “be financially independent” makes it impossible to succeed or fail. Have a concise and precise goal that you can turn into a short statement. Measurable goals have some quantitative dimension to them, such as “Get my credit score to 750” or “Have $12,000 in emergency savings”. Without assigning a value to a goal, it’s also difficult to know if you’re making progress. Attainable goals are reality-based. Don’t make a goal that you cannot realistically attain: this will only discourage you from having a plan at all. Rewarding (also known as Relevant) goals feel good once you achieve them. There should be a positive feedback loop where you finish a goal and then want to finish more. Time-based goals are not open-ended but have deadlines and milestones that you can fail or succeed at. Remember that plans are not set in stone and they can change as you have new information: if you fail at a certain milestone on the way to a goal, adjust that expectation and give it a new deadline.
Specific goals can be clearly articulated. A vague goal like “be financially independent” makes it impossible to succeed or fail. Have a concise and precise goal that you can turn into a short statement. Measurable goals have some quantitative dimension to them, such as “Get my credit score to 750” or “Have $12,000 in emergency savings”. Without assigning a value to a goal, it’s also difficult to know if you’re making progress. Attainable goals are reality-based. Don’t make a goal that you cannot realistically attain: this will only discourage you from having a plan at all. Rewarding (also known as Relevant) goals feel good once you achieve them. There should be a positive feedback loop where you finish a goal and then want to finish more. Time-based goals are not open-ended but have deadlines and milestones that you can fail or succeed at. Remember that plans are not set in stone and they can change as you have new information: if you fail at a certain milestone on the way to a goal, adjust that expectation and give it a new deadline.
Specific goals can be clearly articulated. A vague goal like “be financially independent” makes it impossible to succeed or fail. Have a concise and precise goal that you can turn into a short statement. Measurable goals have some quantitative dimension to them, such as “Get my credit score to 750” or “Have $12,000 in emergency savings”. Without assigning a value to a goal, it’s also difficult to know if you’re making progress. Attainable goals are reality-based. Don’t make a goal that you cannot realistically attain: this will only discourage you from having a plan at all. Rewarding (also known as Relevant) goals feel good once you achieve them. There should be a positive feedback loop where you finish a goal and then want to finish more. Time-based goals are not open-ended but have deadlines and milestones that you can fail or succeed at. Remember that plans are not set in stone and they can change as you have new information: if you fail at a certain milestone on the way to a goal, adjust that expectation and give it a new deadline.
You may find that your priorities differ. Engage in careful discussion to reach an agreement on compromises that will help you both feel comfortable with your financial future. Recognize that some people are more financially minded than others. Determine who will be in charge of a household budget, or consider ways to provide for each partner’s need to feel some degree of control.
Intellectual goals might include furthering your education, participating in leadership retreats, sending your children to college, and attending seminars. Think carefully about how you plan to produce income, whether this involves continuing or advancing in your current line of work or switching careers altogether. Lifestyle goals encompass the things you do for fun and entertainment, as well as the things you feel, are necessary to the quality of life for which you aim. Residence goals might include renting, purchasing a home, or relocation. Consider the lifestyle you want when you retire and set personal financial planning goals that will provide for a retirement that meets your standards.
Continue the same course of action. Expand your current situation. Change your current situation. Take a new course of action. [8] X Research source
Consider how you feel about where you’re currently positioned financially versus where your goals would take you in each of the categories you’ve considered. Do you see particular deficiencies in one area? Perhaps you should give this area special consideration. Remain practical. Step-by-step plans will move you toward your goals without leaving you feeling frustrated or defeated by the scope of your agenda.
Take your current net worth into account. If your liabilities approach or outweigh your current net assets, you’ll want to take steps to change that ratio. While you may opt to focus on developing your net assets, don’t forget that paying off debt can be a great investment. Interest charges mean that even paltry debts can become overwhelming over time. Allocating some resources toward debt reduction now may prevent serious problems from developing later. [13] X Research source
Focus upon incremental growth. By doing so you will create a road map that will take you toward your goals. Be realistic. You won’t be able to adopt all the great strategies you’ve evaluated at once, but selecting a balanced range of goals will help you meet the goals you do choose and grow toward a point when you can take on additional projects.
Goals such as obtaining a new job may not fit neatly into a budget but should be listed in an easy-to-reference location as part of your working financial plan.
