Does the topic of personal finance make you feel uncomfortable?
If so, you’re not alone. A Wells Fargo survey found that 44% of Americans would rather talk about death, religion or politics than discuss their personal finances.
Just because people aren’t talking about it, however, doesn’t mean they aren’t thinking about it. The same survey found that nearly 40% of people named finances as their biggest source of stress and report regularly losing sleep over money.
Not talking about money can have a negative influence on your life. Money is listed as one of the leading causes of relationship turmoil and can affect your happiness and health. So why don’t people like to talk about it?
Here’s how goal setting can help you tame the money monster and take back control over your finances:
With strategic financial goals, you’ll get a clear picture of the current state of your wealth and will develop a plan to improve your financial health.
Whether you just want to get out of debt or want to invest in developing long-term wealth, the first place to start is with your budget.
Goal setting will help you recognize your financial habits and make the necessary changes for the future
Goals can help you stay motivated as you work to improve your financial situation. Part of a long-term plan for wealth building may include strategies for getting out of consumer debt. As you begin to prioritize your spending, you will watch your debt shrink and your wealth grow.
Once your budget is under control and you’ve removed consumer debt from your life, or have learned to manage it, the process of building your wealth goes to the next level.
One of the primary means of accumulating wealth is by investing – that is having your savings work hard for you and multiply into more money.
When you set wealth goals, you take back control over your finances and can start to see money as a tool to help you get to an end-goal instead of looking at your money and finances as something to fear.
Attaching a purpose to your financial goals will help you stay motivated and on track. A purpose is the “why” behind the goal.
An example may be you saving for a home or for retirement.
Use the SMART method of goal setting for an effective way to reach your wealth goals. Like all goals, your financial goals should be Specific, Measurable, Attainable, Realistic, and Timely.
What exactly do you want to accomplish?
Attach a measurable element to your financial goal.
How much do you want to save and how often do you want to contribute to those savings?
Is it possible, given your current financial state, to reach the goal you’re setting?
Create a financial goal that is based on your current financial reality rather than where you hope to be in the future. You can always change your goal post later as your finances grow.
Don’t use nebulous, open-ended goals. Be diligent to attach an end date to your goal.
If you were working towards health goals, it wouldn’t seem strange to seek the assistance of a personal trainer or a doctor. When it comes to your finances, seek professional help. Trusted advisors, your financial planner and educational resources can help you develop realistic goals, and can help you identify strategies and techniques that will propel you to your goal.
Interested in learning more about goal setting? Check out our blog, where we explore new topics regularly.