Five Steps to Succeeding at a Financial Goal

Like many successes in life, achieving a financial goal requires patience, persistence, and at times, reassessment.  I use five steps with clients to help them determine and succeed at their financial goal, whatever it may be.

Step 1: Clearly define your goal.

Many of us have vague goals we plan to accomplish eventually.  As we all know, with this approach our objective will never be accomplished.  Before you can move into the execution phase, you must first clearly define what you are hoping to achieve.

Examples of a clear goals.

“I will pay off my student loans in twelve months.”

“I will save $5,000 before I go on my next vacation in six months.”

“I will save 10% of my income towards retirement.”

Setting a clear goal requires a specific intention.  Your intention should define dollar amount to save/put towards debt, or percentage goal.  Once a concrete amount is determined, define your timeline to accomplish your goal (months, years, etc.).  When your goal has an amount and timeline you’re ready to move forward.

Step 2: Set realistic goals.

You will not achieve your goal if you set an excessively high expectation that makes it impossible to achieve.  Sure, wouldn’t we all want to save 50% of our income and retire at age 40.  But it is important to remember financial planning requires you live today and plan for tomorrow.  Ask yourself, “given my defined timeline, does my current cash flow allow me to realistically accomplish my goal?”

I encourage you to set aggressive goals, but not so aggressive you feel defeated and stop working towards your goal entirely.

Step 3: Execute your goal. 

The goal is defined, and reasonable.  You know how much, length, and its feasibility given your lifestyle and cash flow.  Now you need to set a very specific action plan to execute your goal.  Determine clear steps you will take to complete your goal.

For example, if you are planning to save an additional $200 monthly, do you have a separate savings account it will be set aside in?  This way you can track your level of savings.  Have you setup an automatic monthly transfer?

If your goal is to pay off a student loan in a specified amount of time, do you have a monthly roadmap of how much you will pay towards your loans?  Will you pay a set amount each month or will you apply a bonus or other monies you are anticipating?

It is also important to take as much of the work out of implementation as possible.  Make your execution automatic with automatic transfers and payments if at all possible, this will ensure you follow through with your planned execution.

Step 4: Monitor your goal.

If you are not tracking your goal, it may easily fall by the wayside.  It is important that you check in periodically (depending on the timeline of the goal) and affirm you are on track.  For instance, if you plan on saving $5000 over 5 months, $1,000 monthly, you will want to check in on the third month and make sure you’ve saved $3000 and are on track for the five month window.   The longer the timeline, the more regular check ins you will want to make.

Step 5: Readjust your goal.

Even with the most clearly defined goal and the best plan of action, life can get in the way of our financial plans.  If that happens, do not let your goal be entirely derailed.  Instead, part of your five step plan to setting and achieving a financial goal is to understand, that if you get off track, you will need to simply start back up at step one and readjust your goal.  Ask yourself things like, where did I go off track?  Was I diligent in executing and monitoring my goal?  Was there something out of my control that stopped me from reaching my goal?

Once you can attack head on what derailed you from success, you can make a plan to solve the problem and begin again!


Update to this blog as of June 2018.  If you really want to get aggressive with your goals, and achieve financial planning victory refer to Hardcore Navy SEALS.   I walk through how you can apply the laws of combat to anything, including financial planning to accomplish your objectives.

Author: Jenny ErdmannJenny is owner of Chisholm Financial Planning & Investments. She loves discipline, freedom, America, and financial planning. When not working with clients, she can be found enjoying sunshine and freedom with Lucy, the best dog in the world and Chisholm's mascot.

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