Setting Smart Financial Goals
Managing your money:
Managing
your money wisely is the best way to make sure you and your family gain
financial security. Money management is also extremely important if you own a
business. All business owners need to understand how money comes in and goes
out of their business-if you ignore budgeting details, your venture might not
be successful. There are many similarities between budgeting for yourself and
budgeting for your small business. When you understand the basics of money
management for yourself, you will be more prepared to set up a budget for your
company.
Setting financial goals:
To
manage your money wisely, start by setting financial goals and establishing a
budget plan to help you achieve those goals. Financial goals are simply
statements about things you wish you could afford; for example, you may have a
goal to establish an emergency savings fund of $2,000 by the end of the year.
What are your personal financial goals? If you had $2,000, what would you do
with it? Would you invest it in your small business? Would you buy a car? Would
you make a home improvement? You will be able to accomplish your goals if you
manage your finances and put money aside on a regular basis. The key is to
setting financial goals that are Specific, Measurable, Attainable, Realistic,
and Tractable (SMART): Specific. State exactly what you want to achieve, how
you’re going to do it, and when you want to achieve it. For example:
General Goal Statement:
I
want to improve my finances. Specific Goal Statement: I want to pay off my
credit card bill in 8 months by negotiating a payment plan with my creditor.
Measurable. A financial goal should be measurable so you know when you have
achieved it. General Financial Goal Statement: I will pay off most of my credit
card debt soon. Measurable Goal Statement: In the next six months, I will pay
three of my five credit card bills in full. Attainable. Make sure the financial
goal is within reasonable reach. General Goal Statement: I will save money.
Attainable Goal Statement: I will save $1,000 in a year by putting aside $3 each
day. Realistic. Is the economic goal realistic for you? Don’t ignore your
limitations. Your economic goals need to be tasks that you can reasonably
accomplish. General Goal Statement: By managing my money well, next year I will
become a millionaire. Realistic Goal Statement: By managing my money well, next
year I will be debt free and will have an emergency fund equal to three months
of living expenses. Tractable. Being able to track your progress encourages you
to keep going and reach your fiscal goal. General Fiscal Goal Statement: I will
increase my savings goal every year. Tractable Statement: Each year I will save
10 percent more money than the previous year. If you are SMART about setting
financial goals, you will be well on your way to managing your money in a way
that will provide financial security for you and your family for years to come.
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