Many people, it seems, have a fear of money. Does the thought of having to deal with money make you uncomfortable? Cause you anxiety? If so, it may be that you are clueless when it comes to managing your finances in order to meet your financial goals. Therefore, in order for you to become smart about your finances, you need to set S.M.A.R.T. (Specific, Measurable, Achievable, Realistic, Time-bound) financial goals!
Your Mind-Body Financial Fitness
To become financially fit, you need to take responsibility of your own future and develop the discipline and commitment needed in making plans for every stage of life. Most people only plan for the foreseeable future such as getting married, owning a home and a car, as well as paying for their children’s education. Unfortunately, many fail to realize that they need to be responsible for their retirement, long-term medical care and succession plan.
Preparing your mind now to deal with these issues down the road will ensure you stay financially fit for life. Therefore you must be certain as to how much money you need in order to realize your goals. Be SPECIFIC (What, Why and How) in planning your goals for your future!
As the saying goes, “if you can’t measure it, you can’t manage it”. Do not forget that you must also plan in exact terms, how much money you want to have! The whole purpose of setting financial goals is to inject discipline in the process and give you a sense of accomplishment when you achieve your financial goals. This is the MEASURABLE aspect of goal setting. There are numerous goals for you to set, for example, funding your retirement and children’s education.
In addition to having a strong financial plan in mind, you need to be physically aware of your financial position at all times. This can be done by continuously checking each component of your financial situation such as your loans commitment, credit card balances, as well as monthly income and expenses. Even though you do not need to do all these on a daily basis, it is imperative that you do it, as it ultimately determines the broad picture of your financial landscape. Hence, knowing your financial landscape ensures an ACHIEVABLE financial goal is set.
Begin Your Financial Circuit Training
Just as a circuit training at a gym, you must go through a series of exercises to ensure total financial fitness is achieved. This means that knowing your financial position in itself is insufficient. You also need to know how to control your finances.
According to Thomas J. Stanley and William D. Danko in their book titled The Millionaire Next Door, many millionaires think that wealth is much more important than income. They believe that they need to â€œmake it, keep it, and grow it, rather than just make it and spend it. They believe that the way to become rich is by minimizing consumption and getting the most value of everything they purchase. Hence, in order to accumulate wealth, you need to control your expenses as well.
Furthermore, in order to complete any fitness regime, you need to be committed to your plan, and this requires persistence and diligence. You also need to gain the support from the whole family as most plans fail without the understanding of family members. It is your responsibility to ensure they are aware of your commitment and target to achieve your financial goals. Therefore be REALISTIC about your financial goal as well as other people support for you.
Do it now!
Your financial goal must be TIME-BOUND. You need to know exactly when you want to achieve your goal. Putting an end point on your goal provides you with a clear target to work towards achieving. Without a set timeframe, you would not feel the urgency to start taking action without any procrastination.
So what are you waiting for? Set a S.M.A.R.T. financial goal today and begin your journey towards becoming financially fit!