Anyone who actually sits down and does a budget realises that setting goals is important. The objective of having a budget is to actually set and meet your financial goals. Budgets follow some pretty simple principles. You write down what the goal is – such as paying all of the bills and having some money for savings and entertainment; then you write the objectives – these are each of the actual amounts that you need financially, including where the income to meet these is coming from; then you itemize the tasks to meet these objectives – paying bills on time through the use of your budget spreadsheet. And voila! You are able to meet your goal!
It sounds pretty simple. And sometimes it is. This principle can be followed in order to meet any goal in life. State the goal. Write it down! Read it and make sure it’s measurable, just like your budget is. A goal that isn’t measurable isn’t really a goal. There needs to be a timeline associated with it (just like a budget). Then write down what objectives are needed to accomplish that goal. If it’s financial, then it’s very easy to measure. But if it’s not, then measurement might be a little more difficult at first. This sometimes requires some real thinking about the goal and what it is that you really want. A fitness goal, for example, is often first stated as, “I want to lose weight and get into better shape.”
Look at that goal. Is it measureable? Of course not. How much weight? And when should the weight be gone by? And what kind of better shape – more muscles? Better cardio? Goals, whether personal, career, or financial, need to have clear outcomes and timelines. The weigh loss goal might be reworded into “lose 20 pounds within six months.”
This is why it’s also good to break them into objectives, just like a budget. What are the bigger level tasks that need to be accomplished in order to achieve the goal? In a budget these are usually things such as save X dollars a month, pay the rent, groceries, and other specific bills, and bring in the pay on time. For a personal goal, such as losing weight, it might be to join a gym or find an activity that allows you to get the required exercise to meet the goal. And it could include a specific amount of weight to lose each month.
Setting specific tasks to meet the actual objectives is also required. And everything must have a timeline! With a budget, these tasks are easy to know. To pay the rent, you must give the landlord a cheque for a certain amount by a certain date. That is pretty straightforward. And the same with savings goals. A certain amount of money must be put away each month, at a specific time, in an already specified investment. Hopefully your objective has already stated what kind of investment is needed to meet the larger goal.
With the losing weight example, the specific tasks can be quite focused, as well. These can be things such as go to the gym on Tuesday, Thursday and Saturday and run 1 mile. And each month the objective can be changed to increase the amount of exercise required.
So, with any goal one can see that there are three elements:
- The clearly stated goal that is measurable and includes a timeline
- The objectives that are required to meet the goal. These must also have timelines and be measurable.
- The specific tasks required to meet each objective – also time specific and measurable.
Use this method and you will find that meeting your goals becomes easier. Writing things down and actually following through on the plans can make many things in life much more fulfilling! And there is such a feeling of accomplishment, when even the smallest goals are completed! Try it, it’s worth it!
Tags: financial goal setting, goal setting, meeting your objectives
