How to set and achieve your financial goals?

There are many important aspects in personal finance, but without a doubt the most important is to be clear about our financial goals and learn to establish them. If we don’t, we simply can’t achieve long-term economic stability, let alone think about achieving financial freedom. We must also remember that financial goals are usually a reflection of our life goals.

Some possible financial goals include saving for retirement, buying a home, getting out of debt, or being able to travel.

Unfortunately, many people are not clear about their life goals. Some know it’s good to save, but they don’t know why. They have trouble identifying their priorities and therefore get lost along the way.

That is why I have decided to write this series of columns with specific advice to establish and achieve your financial goals.

What are your priorities?

Before setting goals it is important to have a clear idea of ​​what your financial priorities are. What is the most important thing to you? What do you value most in terms of your financial situation? Is it long-term financial security, the freedom to work on your passions, or the flexibility to travel and enjoy life?

Knowing what is most important to you in your life is what will help you set financial goals that are aligned with your values ​​and ultimate goals.

For example, if your priority is long-term financial security, you may want to set goals like saving for retirement, or having a good emergency fund and having the insurance you need.

If your priority is the freedom to do what you’re passionate about, you may want to focus on goals like saving to start your own business or study abroad for graduate school.

If your priority is flexibility to travel, you may want to set goals such as saving to pay for a trip abroad and finding an activity that allows you to work and earn income from anywhere in the world.

If you are in debt, it is very likely that your immediate priority is to get out of those debts, since otherwise you will not have the ability to save to achieve or set “smart” goals.

Now that you know what is most important to you, it’s time to set SMART goals, that is, they are specific, measurable, achievable, relevant, and temporary.

A financial goal must be specific and achievable to be effective. This way you can track your progress and know how you are on your way to achieving it.

For example, instead of simply saying “I want to save for a trip”, it is much better to specify: “I want to save 3,000 pesos a month for the next 24 months to pay for a trip to Europe”.

Also, it’s important to set goals that are challenging, but also realistic and achievable based on your current financial situation and income. If you set goals that are too ambitious, you may feel frustrated and discouraged. But on the other hand, if you set others that are too easy to achieve, you may not try hard enough and make the progress you need. As in everything, a balance must be sought.

Goals need to be relevant to the priorities you’ve set, in order for them to make sense. What am I doing this for?

Temporality has to do with the time in which you want to achieve each goal. As in everything, there will be short, medium and long term goals. In general, the ones with the longest term are usually the most important and the ones that should have priority.

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