It’s Not Rocket Science – Achieving Goals

As we prepare to wrap up another year, many people will once again be setting goals for the year ahead – count me among those people. If financial goals are among your resolutions, then the next logical question is, “How do you get there?” Read on for the answer.

First of all, don’t forget to be realistic when actually setting financial goals. You don’t have to shoot for the moon to make a difference in your finances. And remember that your goal doesn’t have to be about amassing large amounts of money. It can be as simple as putting a little cushion in place for splurge purchases.

Once you’ve set your goal, the first thing you want to do is write it down and post it where you’ll see it frequently. Is your goal to pay off your credit cards? How about a sticky note that says, “Debt-free = stress-free,” stuck to your credit card. The next time you are tempted to stray, you’ll have a solid reminder to make you think twice. If your goal is saving for something great like a tropical vacation, get out that beautiful photo of the beach and tape it to your computer monitor for motivation.

But beyond setting the goal, how do you get there? Once you’ve established a dollar-amount, break it down into time increments. Let’s continue with the credit card debt example.

Say your balance is $2,000 (which is closer to what the everyday American carries than the scary $8,000+ average often cited) and you’d like it gone in a year. Divided by 12, that’s about $167 per month needed to reach your goal. (I know this calculation doesn’t take interest into account, but I’m trying to keep it simple)

So how do you find an extra $170 or so in your monthly budget? There are some great tips in this blog post by my friend Andy, or you could try the standard ideas like packing your lunch, scaling back from a latte to a drip coffee with lots of milk, or cutting back on entertainment spending by ordering the drink special when out with friends instead of your expensive favorite cocktail.

Most important to achieving any financial goal is to make it automatic. Your credit card minimum payment may only be $75, but in your head, it must become $170 until the balance is $0.

If your goal is to save some money, set up an automatic transfer to your savings account each time you get paid. Just like you don’t miss a mortgage payment because it’s automatically withdrawn each month, you’ll find it much easier to save when it happens without your having to click a button each month.

Setting and achieving financial goals is not rocket science, and even the most strapped of us can make them happen. Keep it simple, be gentle with yourself if you get off track and celebrate the little victories.

Now it’s your turn: What are your goals for 2011? Mine include saving some splurge money for our tropical vacation in March and investing in continuing education to keep me sharp on personal finance topics. Please share your goals and any additional tips you have for getting there below in the comments.

Kelley C. Long is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

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