How to Determine Your Financial Goals: Both Short and Long Term

Ever have a goal to save more, get out of debt, or make more money? Most people, especially at the start of a new year, set goals and never stick with them. One reason is they never write down the specific goals they desire to reach financially. Just as important as planning your budget, it's as just important to plan your financial goals. The best way to determine what your financial goals actually are is to simply ask your elf the question, what are my short and long term goals? A great way to accomplish this is to talk your spouse to help draw out your financial priorities. Start by making a list of what is important to each of you and put them in the order of most important to least important. Then compare your lists so both of you know what the others priorities are. Next integrate them and begin putting together your plan to achieve your goals.

What are short terms goals? Short term goals can be anything you'd like save for or purchase. Anywhere from within the next month, this year, or maybe even the next two or three years. Next try to determine whether your goals are either something you "want" or something you "need". Dave Ramsey suggests asking yourself these three questions:

"If we didn't purchase this item this year would it make a big difference to both of us?" If it doesn't, it slides over to the wants list.
On the needs list, ask yourself, "If we could only purchase one of these items by saving for it this year, which one would we prioritize first?" Then, choose which would be the second and so on for both the needs list and wants list.
"How much will each item cost?" Begin researching to what these particular items cost.

Once you finish answering these questions, add the dollar amount of the needs list and divide it by twelve months. Once you have determined the amount, place it in your budget separately from your normal savings bucket and start saving for it.

What are long term goals? Loan term goals are those that you plan on achieving in the next three years or longer. For instance, my wife and I started our plan earlier this year to be debt free in the next five years. Under normal circumstances we weren't able to pay off all of our credit cards in a few months or even year, but five years was a realistic goal. Just like short term goals ask yourself questions to determine your specific long term goals. Some of the questions you can ask yourself can cover:

Paying off debt
Savings
Retirement
Funding College for your children
Automobile replacement
Travel
Pay off your home
Starting a business
Giving to Charity
Paying for your child's/children's wedding
Remodel your home
Financial freedom

The list is endless, but you will never reach your goals if don't write them down, make a plan to execute them, and stick to them.

Let us hear from you. What are some of your long and short term goals?

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

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