GENERAL  -  FINANCIAL GOALS
 
 

PLANNING TO ACHIEVE YOUR FINANCIAL OBJECTIVES

Most people are so busy with the day-to-day demands on their personal and financial lives that they neglect to sit back periodically and reflect on what they want to accomplish with all their hard work. One thing you should do — if you haven't already — is establish some financial-planning objectives. What do you want to accomplish in your financial life? If you don't have at least some idea of what you want to accomplish, you'll have difficulty taking the necessary actions to achieve your financial dreams. This section will help you:

v Establish goals and objectives that are important to you

v Map out strategies to accomplish your goals and objectives

v Establish the priorities to achieve the most important and urgent objectives first
 
 

Your Most Important Financial Goal

Everyone's primary financial planning goal is financial security. Financial security means living the rest of your life without having to work or, if you're retired, not having to worry about running short of money in the face of constantly rising living costs. Most people don't achieve financial security until about the time they retire, and there's nothing wrong with this. What is unfortunate, however, is the number of people who never achieve financial security — not by age 65, not by 75, never.

Achieving financial security requires a lot of planning and some sacrifice because the only way you're going to be successful in reaching your most important goal of financial security is to save regularly. In other words, you must learn sooner, rather than later, to live beneath your means — even after you're retired.

Identifying Important Objectives

Goals are broad, relatively open-ended forecasts of what you want to achieve. As mentioned above, financial security is your most important financial-planning goal. Objectives are more specific ends that you want to achieve within a definite period of time. You probably have a variety of financial-planning objectives, although you may not yet have taken the time to think about them in much detail. Among the more common objectives are:
 

Saving more regularly


Improving personal record-keeping


Reducing debt


Assuring complete insurance coverage


Increasing income through a part-time job


Buying a home


Making a major purchase


Reducing income taxes


Meeting children's college-education costs


Retiring early


Providing support for elderly parents


Making sure your estate is properly planned.

You should be pretty specific about the objectives you have and how you plan to go about achieving them. Be sure to write them down and discuss them with your spouse from time to time. Also, remember that objectives may change for a number of reasons, including age, changes in income, and changing marital or parental status. For example, the arrival of children often dramatically alters a couple's financial-planning objectives.

Devising Strategies

Strategies are detailed plans that help you achieve your financial objectives. Identifying objectives is the easy part. Devising strategies to achieve them, and sticking to those strategies, is more challenging. For example, many people want to retire early, but far fewer are able to come up with a plan that will allow them to retire early — and comfortably. Even people who devise a realistic strategy often end up not sticking with it. This section will help you devise workable strategies to meet your financial objectives.

Prioritizing Your Priorities

Some objectives are more important than others. Therefore, assigning priorities to your financial objectives is essential. Of course, your overall goal of achieving financial security by the time you want to retire is your first priority. But what's next? Many people would rank securing adequate insurance coverage pretty far down on the list of priorities, yet it is so essential to financial security that it should be a very high priority. Insufficient insurance may jeopardize years of past — or future — savings.

You should also set timetables for achieving your objectives. But be realistic  —  don't become obsessive. Rather, concentrate on achieving reasonable and sensible financial objectives. Also, take into consideration non-financial as well as financial concerns. For example, don't leave out your life-style wants and needs. While these shouldn't be extravagant, they also shouldn't be ignored.