set your financial goals

What are your financial goals? Chances are you don't know. Even those who think that they do know seem not to be focused enough when it comes to achieving them.

The process of setting financial goals is not overly difficult, but it does mean you have to sit down and form a plan - something that is tiresome for a lot of people. The act of putting down the goals on paper, however, will go a long way to helping meet your personal financial dreams.

Achieving financial goals requires a combination of dedication, perseverance, and most important, knowing where you want to go. Here are the steps you need to take to achieve your financial goals:

Identify Your Goals: Have you taken the time to sit down and come up with a list of your financial goals? Many people wonder why they can never reach their financial goals when they have never taken the time to even understand what those goals are. The first step is to take the time to identify your goals.

Many people also have "financial notions" which they think to be the goals, but they aren’t in reality. Financial notions are ideas that are kind of fuzzy in your mind about money and personal finance, but which have never been considered thoughtfully or in detail. Financial notions aren't concrete enough to be goals that can be achieved most of the time.

Focus The Goals: Once you have written down your financial goals, you're ready to go to the next step. While some people manage to write down their goals, the act of writing them down isn't enough to help you achieve them. Your financial goals need to be focused.

Look at your list of financial goals. It may look something like this:

Send the kids to college
Buy a new car
Save for a down payment on a house
Take a vacation
Paying off credit card debt
Begin planning for retirement

The problem with these goals is that they're all too broad. When goals are written down in broad terms, it's much more difficult to achieve them. In step two, you need to focus each of the goals as much as possible. One good way to accomplish this is to put a date on the goal.

For example, "Paying off credit card debt" can be focused as "I want to pay off all my credit card debt by December 2007" or "I want to pay off credit card x within three months."

"Save for a down payment on a house" can be focused by giving it both a dollar amount and time frame. "I want to have $20,000 saved for a house down payment by December 2007" makes it much more focused.

Many times when goals are listed in broad terms, people fail to identify the specifics that are parts of the goal. "Buy a new car" may really mean "I want to buy a new car without taking out a loan" or it could mean "I want to buy a new car with only a $2000 loan." It depends on the person and that's why it's important to get the specifics of exactly what you want to be able to achieve the goal.

Write A Goal Plan: Most financial experts now say that you should break the goals into short, medium and long term time frames with short being less than a year, medium being 1 to 3 year and long being more than 3 years. While this is a good start, it again fails to list the specifics needed to make the goals a reality.

In the previous step you have already made a time frame for when you want to accomplish the goal. What you now need to do is lay out a plan on how you're going to achieve the goal. It's much like wanting to get someplace clear across the country. If you start heading in the general direction, there is a chance that you'll eventually reach where you want to go, but if you have a map of how to get there, you're much more likely to get there and in a lot less time. The more detailed the map, the better the chance of reaching your destination in the least amount of time.

In the same way, the more focused and detailed you can be in creating a plan to reach your financial goal, the better the chance that you will be able to achieve the goal in the least amount of time. This is because the more detailed you can be, the more you know exactly what your financial goal is and the steps you need to achieve it.

It will take some time to write out a plan for each of your financial goal, but the process of writing the plan for each will help you focus the goal. In fact, your goal may change a bit as you begin to lay out a plan on how to achieve it which is perfectly acceptable.

Focus The Goal Plan: Just as you focused the goal in the second step by giving it a date on when you wanted it achieved, you need to focus your plan to achieve the goal. That means assigning each of the steps in the plan a time period by which you want to achieve it. For short term goals (under a year), you should set up steps to achieve on a weekly basis while medium and long term goals should have steps set up to achieve on a monthly basis. By giving each of the steps in your plan to reach your financial goal a time frame, you're much more likely to achieve the financial goals.

Highlight The Goals Now that you have financial goals that are specific and have a plan to achieve them, it's time to put the goals at the front and center. Many people spend time writing their financial goals and then put them in a folder which they don't look at again for another year when they decide to write their financial goals again. To make sure that your financial goals are not forgotten, take your list and place it someplace that you will see it every single day, preferably a number of times each day. Tape it to your computer, put it on a bulletin board above your desk, slap it on the refrigerator - any place that you are going to see it each and every day to remind you to keep working in the direction of your financial goals.

Review Your Goals: As you begin putting the steps to your goal plans into action, be sure to review them on a regular basis. Short term goals of less than a year should be reviewed on a weekly basis while longer financial goals on a monthly basis and make suitable changes where and when necessary. New issues arise and circumstances change. Be flexible, but keep heading in the direction you want to go to achieve the financial goal.

Tell Everyone You Know: While I left this step for last, it's actually one that you should be doing from day one and throughout the entire time you are moving toward your financial goals. Tell every one and anyone what your financial goals are.

It's much easier to slack off on your goals if you're the only one who knows what they are. If you get lazy, you're the only one that knows and nobody will be there to ask you "what about that goal you set?" If you tell a lot of people, then there is more pressure for you to keep going. All the better if the people will hold you up to your goals - we all need this from time to time.

Money and financial matters can be a touchy subject for some people, so if you don't want to tell anyone that is close to you, at the very least begin a journal detailing your financial goals and progress toward them. Often times it's taking the step to let others know that puts the true commitment behind you actively progressing toward your financial goals.