Setting realistic, achievable objectives and reinforcing those objectives with actionable steps is one simple but critical strategy that works to make seemingly impossible tasks suddenly utterly doable.
Setting realistic, achievable objectives and reinforcing those objectives with actionable steps is one simple but critical strategy that works to make seemingly impossible tasks suddenly utterly doable. Goals of any kind can help to keep both individuals and organizations on track and working towards a better future, even if you’re looking at it from the bottom of a hole.
Whatever your current state of financial health, establishing monetary targets for yourself, your family, or your business can set you on the path towards stability, security, and even growth. Let’s talk about it.
Financial goals are objectives which outline where you want to be, behaviors you want to cultivate, and dreams you hope to realize – in both the long and short term – all through a monetary lens.
Financial goals most typically align with other objectives you want to achieve in life, although they may also exist more abstractly. For example, an aligned goal may be “save x amount to put towards my daughter’s college fund,” where a stand-alone financial goal may be “earn $100K a year.”
How you define your financial objectives – in specific dollar amounts, percentage variables, ratios to a whole, points, etc. – will depend on the nature of your goal, however they should always aim to be as specific as possible. This helps to provide you with a specific metric that allows you to measure progress towards your goal, and understand more precisely when that goal has been reached.
There is a lot of overlap in the list of objectives individuals vs. organizations may set; the main difference often lies in how each of these objectives is scaled.
Both companies and singular persons navigate financial issues relating to debt, credit, taxation, budgeting, and money management. Both parties have overhead to pay — whether that’s residential rent or payroll – and both may have advanced goals which may require financial planning and strategy to make possible.
For example, an organization may set a financial goal based on the objective of creating and hiring for a new executive director of marketing role. They will need to budget for associated costs and ensure they have the cash flow in order to adequately support this new position with minimal cuts.
An individual may want to adopt a puppy, and will engage a similar strategy to make sure they can comfortably afford bringing an animal into their home. They will have to create a new budget that incorporates the cost of keeping a dog, including day-to-day expenses as well as emergencies, and work to make sure they are generating enough income to support these costs within their means.
This can be applied to other scenarios as well, such as addressing debt, supporting dependents/employees, or managing one-time event expenses: similar strategy, scaled to the needs of the entity in question.
You may begin to define financial goals based on the projected cost of other objectives you want to reach.
For example, if you want to buy a new car, your ultimate financial goal may be to save an amount which is equal to the cost of the vehicle. With this amount in mind, and based on your own monthly income and expenses, you can set a budget defining the amount you need to save each month over x number of months until you can make the purchase. Saving x amount each month is itself another financial goal.
Your financial goals may also be defined as broader objectives that help you to support a better state of financial health, and so the cultivation of certain behaviors relating to money can be considered a financial goal as well.
For example, if you want to reduce your debt by a specified amount over the course of the next 5 years, this can include shorter-term goals like budgeting, increased income, and allocating x amount each month towards paying off whatever deficits you may have.
Financial instability and uncertainty is one of the primary stressors in the modern context. But setting financial goals can help to alleviate some of the effects of this stress by giving individuals and businesses alike a road map towards a well-cultivated financial standing.
Financial objectives also help you to do the most with your money. Whether over the short or long term, having a strategy in place for your finances helps you understand the purpose of every penny deposited into your bank account, keep track of your finances, and ensure nothing is wasted and everything is working to your benefit.
Establishing a timeline is one critical aspect of setting financial goals, and helps you to understand daily, monthly, and yearly financial responsibilities you need to track in order to reach your objectives.
Short term goals are most typically established within one to three years. Examples of short-term goals include:
Long-term goals can sometimes be set as far in the future as 50 or more years: especially in the case of building an IRA or investment account. Examples of long-term goals include:
Short-term financial goals may be set on a rolling basis, and whenever you want to set them. Of course, you should give yourself adequate time between setting your goal and the projected date of access if your objective exists against a timeline.
For example, if you’re saving for an international trip with a fly-out date of 1 year from now, you would have more time to save and less to save each month if you set your objective today rather than in 6 months.
It is never too early to set long-term financial goals. Especially with regards to investment accounts and retirement savings, the earlier you start, the greater your end yield will be. If you’re paying off debt, an earlier setting of this objective will allow you to eliminate your deficits sooner rather than later.
Financial wellness is most typically defined as a state of ease, stability, and comfort with regards to one’s money and assets. Ideally, in practical terms, this also means minimal debt, comfortable savings, a healthy retirement fund, and the day-to-day ability to live well within the limits of your income.
And financial goal-setting can be leveraged to help you achieve financial wellness, whatever the current state of your finances may be. If establishing monetary objectives gives you practical, achievable steps to take towards singular objectives – escaping debt, buying a home, creating a budget, saving more each month, etc – it can also help you work towards cultivating financial stability, and establish the specific numbers and behaviors it will take to get you there.
In addition to creating financial objectives and establishing the steps we need to take towards these goals, it is also sometimes necessary to define the tools and resources we will need to help us along the way. Sometimes we can see the horizon, and even the path forward, but the road markers may be obscured or we might run into rough terrain that requires a little extra support to get through.
Organizations are in a position now to help their employees achieve their financial goals, whatever hurdles or obstacles may lie ahead, with Origin. This comprehensive solution offers education, financial planning and tracking tools, and access to professional financial counselors, all of which works to guide individuals towards increased financial wellness and monetary confidence.
See what else Origin can do for your people today.
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