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Setting Smart
Financial Goals
Managing your money
wisely is the best way to make sure you and your family gain financial
security. Money management is also extremely important if you own a
business. All business owners need to understand how money comes in and
goes out of their business-if you ignore budgeting details, your venture
might not be successful. There are many similarities between budgeting
for yourself and budgeting for your small business. When you understand
the basics of money management for yourself, you will be more prepared
to set up a budget for your company.
To manage your money wisely, start by setting financial goals and
establishing a budget plan to help you achieve those goals. Financial
goals are simply statements about things you wish you could afford; for
example, you may have a goal to establish an emergency savings fund of
$2,000 by the end of the year.
What are your personal financial goals? If you had $2,000, what would
you do with it? Would you invest it in your small business? Would you
buy a car? Would you make a home improvement?
You will be able to accomplish your goals if you manage your finances
and put money aside on a regular basis. The key is to setting financial
goals that are Specific, Measurable, Attainable, Realistic, and
Trackable (SMART):
Specific. State exactly what you want to achieve, how you're going to do
it, and when you want to achieve it. For example:
General Goal Statement: I want to improve my finances.
Specific Goal Statement: I want to pay off my credit card bill in 8
months by negotiating a payment plan with my creditor.
Measurable. A financial goal should be measurable so you know when you
have achieved it.
General Financial Goal Statement: I will pay off most of my credit card
debt soon.
Measurable Goal Statement: In the next six months, I will pay three of
my five credit card bills in full.
Attainable. Make sure the financial goal is within reasonable reach.
General Goal Statement: I will save money.
Attainable Goal Statement: I will save $1,000 in a year by putting aside
$3 each day.
Realistic. Is the economic goal realistic for you? Don't ignore your
limitations. Your economic goals need to be tasks that you can
reasonably accomplish.
General Goal Statement: By managing my money well, next year I will
become a millionaire.
Realistic Goal Statement: By managing my money well, next year I will be
debt free and will have an emergency fund equal to three months of
living expenses.
Trackable. Being able to track your progress encourages you to keep
going and reach your fiscal goal.
General Fiscal Goal Statement: I will increase my savings goal every
year.
Trackable Statement: Each year I will save 10 percent more money than
the previous year.
If you are SMART about setting financial goals, you will be well on your
way to managing your money in a way that will provide financial security
for you and your family for years to come.
Article Source:
www.articledashboard.com
For more helpful tips about
managing your money and to improve your
financial literacy, visit Your Money and You (yourmoney.accion.org).
This article was provided by ACCION USA
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