Financial Goals, Needs, Wants...

Determining your financial goals and distinguishing between needs and wants isn't as easy as it sounds.

Some things to consider when setting goals:

• short term (less than one year),
• medium (one to five years)or
• long term goals(five years or longer) require different planning strategies

Goals whether short term, medium or long term should be "smart" goals:

• Specific
• Measurable
• Adjustable
• Realistic
• Team oriented

Be Specific-- State the goal such as:  I want to earn $40,000 dollars this year as opposed to stating the goal, I want to earn a lot of money this year.

Quantify your goals in terms of dollars and length of time so that they can be measured to determine whether you were successful in achieving your goals.

Goals should be adjustable, and flexible because life is constantly changing and our goals may need to be changed on a continuing basis as well.

Realistic goals have a good chance of being achieved.  If you have a university education there's probably a good chance of earning $40,000 per year. But if you have a high school education, it probably isn't realistic to think that you could earn $40,000 a year unless you we're working in the Trades, or in Construction or something like that.

Team oriented goals are those made together with someone significant in your life either in a family, a partnership, or in an organization, etc. When you must work with someone else to achieve something it only makes sense to include them in the goal making process.

Include Significant others in goal making process...

If significant others are not included in the goal making process they may feel left out and may retaliate or sabotage the goals you are trying to achieve.

Sabotage and retaliation

Goals can be sabotaged on many levels and usually it isn't done on purpose. The person doing the sabotaging sometimes doesn't realize that they are, or understand why, they are sabotaging the goals.

Everyone has their own feelings about money and their own ways  of  handling  money.

Money has many different meanings and illicit many different emotions from people. Depending on how much money we need and how much money we have we can also experience lots of difficulties with handling money.

Distinguishing between a need and a want: 

• may be very difficult to do
• might be different for everyone
• some people's wants may be other people's needs and vice versa

I need to keep my vehicle for work, errands or doctor's appointments:

I've heard several people express to me over the past few year's, "that they need to keep their vehicle for work or to run errands or to go to doctor's appointments". They're usually telling me this when I'm trying to assist them to formulate a plan to help them out of serious financial difficulty.

When I hear this statement, I want to say, "yes, you may need your vehicle, but do you need a $60,000 vehicle you can't afford to make the payments on"? or "Do you need a vehicle that can take you from point A to B until you are out of financial difficulty".

I've never actually said that statement to anyone I've been counseling. If a person is serious about getting out of financial difficulty they will figure it out for themselves once you've explained what some of the options are that could be done to remove some of the obstacles to financial stability.

The solutions to our financial problems never come from someone else, they come from inside ourselves.

I have witnessed this over and over the past few years, people will take back their leased vehicle, or sell the more expensive vehicle and purchase something that they can more easily afford.

People do all kinds of amazing things to deal with their finances:

• they get a second job to earn more money
• do errands to earn additional income
• become creative in ways to solve the difficulties
• buy clothes from a second hand store
• rent a less expensive place or have someone move in to share expenses
• move away to get a better paying job
• ask for assistance from family and friends
• negotiate with creditors

What kinds of things do you do to deal with your finances?

If you have mastered determining your financial goals, needs and wants you are ready for  "Prioritizing who to Pay" in Money Management: Part 2.