Goals can be as individual as the people who set them.  But, people who are successful at reaching their goals have a number of things in common.

The first is simply that financially successful people have goals.  Rather than wait for financial milestones to come along, they actively plan for the things they want to achieve.  They actually write down and prioritize their goals.

Activity:  List four of your financial goals.

The second is that their goals are specific.  A common goal is to own one’s own home.  But that is not very specific.  More specific is that same goal written as "To have $15,000 in five years as a down payment on a new home."

Activity:  Add specificity to the four goals you have written.

The third attribute of effective goal setting is to have a clear picture as to what it takes to achieve the goal.  For the house down payment goal above, this would mean calculating the monthly savings amount needed to reach the goal.  One would have to save $215 per month for the five years and earn six percent interest on the funds in order to reach the $15,000 goal.

Activity:  Calculate the monthly amount you will need to save to reach your goals.

The fourth attribute of effective goal setting is to take the steps necessary to accumulate the funds.  Here, the "pay yourself first" approach is important.  This means that saving is the first thing you do, not the last.  Savings are not what is left over at the end of the month.  Instead, they should be treated just like any other expenditure.  Fortunately, the funds needed for reaching a goal can be set aside each month through automatic deduction from one’s paycheck or checking account into savings accounts.  Separate savings accounts are a good idea so that funds for each goal are kept separate.

Activity:  What will you do to set things in motion to achieve your goals?

The fifth attribute is vigilance.  Progress should be monitored periodically, at least annually, to make sure that the savings are accumulating sufficiently to reach the goal on time.  If necessary, adjustments can be made in the amount being saved or the ultimate point at which the goal will be achieved.  It is also a good idea to consider whether the goal is still desired and that it has the same priority among other goals.

Goals can be short-term (completed in less than a year), intermediate term (completed in one to four years) and long-term (completed in five years or more).  Budgets provide a good way to break goals down into small steps.  If you want to have $750 for a vacation in ten months you would set a $75 savings allocation in each monthly budget.  Intermediate- and long-term goals actually are a series of short-term goals.

Activity:  What are your plans for monitoring your progress to reach your four goals?

One of the important aspects of working to achieve financial goals is that success breeds success.  What that means is that once a goal is achieved, the savings being set aside can be turned to the achievement of other goals.  But it is also true that confidence builds as goals are achieved.  That confidence provides the base for tackling even more sophisticated and difficult goals.  So even if you can’t begin work on all your goals right away, you can start on working on one of them.

Today isn’t too soon to do so.  Good luck!

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