Decision Making and Goal Setting

What’s so important about setting goals? Everything. A critical part of getting and staying out of debt is controlling your day-to-day finances. You can accomplish this by living within your means and following your budget.

The best way to get what you want to setting goals. A goal is a desired outcome that is driven by a specific future need. It is something you plan for and work to achieve. You’ll dramatically increase your chances of achieving what you set out to do if you identify and prioritize your goals, create and implement a plan for achieving them, and monitor your progress toward your goals.

Some common financial goals are: To become debt free, to save for a comfortable retirement, to buy a home, and to send your children to college.

Needs Vs. Wants
The second step of goal setting is to prioritize. You should ask yourself whether the goal is something you need or want. Remember, your list of goals should only include the things you want after you’ve listed all of the things you need.

Different types of goals: Short-term, Mid-term, and Long-term
Once you’ve identified and prioritized your goals, you’ll need to create and implement a plan for achieving them. To do this, you need to calculate the dollar amount required for each goal so that you can figure out how long it will take to get you there. The total dollar amount will show you timeframe the goal falls in to:

Short-term—you’d like to achieve the goal is less than one year
Mid-term—you’d like the achieve the goal is one to five years
Long-term—you’d like to achieve the goal in more than five years

Creating a plan for achieving your goals
Once you establish the total dollar amount and the timeframe needed, you’re ready to create your plan. The monthly dollar amount may change the timeframes of your goals. The best method is to create a goal-setting worksheet. Use the worksheet to input your monthly dollar amount you can put toward your goals.

Decision making and goal setting are an important first step towards financial well-being because it will help your stick to your objectives, and it will help sort out your needs from your wants. With this information, you can calculate how long you’ll need and how much you’ll need to contribute to your plan each month to make your goals a reality—you can do it!