The Makings of a Good (Financial) Goal

A good financial goal must meet several criteria before being called “good.”  Below are the characateristics of a good financial goal:

Measurable.  You must ba able to chart progress.  If there is no measurement then you can’t identify if you’re progressing or not.

Specific.  The goal must have specific timelines in which it must be achieved.  To say “lose more weight” is not enough.  To say “lose 15 pounds in 45 days” is specifically stated.

Realistic.  Can your goal be achieved?  If you select unrealistic terms it will not be a good goal.  To use the previous example, desiring to lose 15 pounds in 7 days would classify as unrealistic.  The goal must be realistic to have a true chance of being achieved.

Sample Goal:  To fund a $1,000 emergency fund by June 2009.

Is it measurable? Yes

Is it specific? Yes

Is it realistic?  It depends on your situation.  Do the math.  $1,000/6 = 166.66 saved per month.  If you don’t have this much avilable to be set aside then a 12 month time horizon ($83.33 per month) may be more realistic.

When setting a financial goal ask your self the following questions:     Is it measurable? Is it specific?  Is it realistic?                                            

This should help you know if you’re on your way to success.

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