Setting financial goals

[jIM_Ohio]

Part of a good financial planning process is setting goals.

I am curious how many people here write down their goals in a place other than this forum?

How many goals are on the list, and do you prioritize them?

Many people come to forum looking for help, yet I don't see concrete goals understood by the person asking questions or the people offering help. Thoughts?

[corn18]

Goal is $1M net worth then $3M retirement savings. I track it in excel and make adjustments and formulate strategies to meet the goal. Time is not my friend (48) so I have to do things on purpose to make it to those goals.

[LittleMissSplendid]

I have my goals written in several places in my home before bringing them to the forum or my blog here. I keep lists of them by category (finance, career, health, etc) on my computer and I also made a vision board. Shorter lists of my top priority goals are often on sticky notes throughout the house to both motivate and remind me of them.

[Leo]

I set my goal every year since I am still young. I have it in my email and phone. Last year was to pay off all my credit card debt. This year is to start to contribute to Roth IRA.

[kork13]

I list our financial goals in the same spreadsheet that I keep our budget on. I categorize them as short, mid, and long term goals, but I wouldn't say that I prioritize any of them... I sort of see it as all of them need to be worked towards in order to accomplish them, so they are of equal importance. With that said, because the short term is more time compressed, I may (and have) occasionally funnel savings from a longer term goal to a shorter term goal in order to ensure accomplishment... I can make up the difference later. We have 8 goals listed, about 2-3 per time-frame.

[autoxer]

I recently wrote my 2015 plan which included how I'm going to direct my savings into investments and how much I expect to spend. I also have a list of the bigger one time expenses that I'm expecting this year. I'm planning about a 10% reduction in spending and based on last years cash flow, I figured out where I want to make those cuts.

My long term goal is to be financially independent by the time I turn 50. I haven't written that one down before now, but that is tracked in several spreadsheets. One spreadsheet for net worth and one with a projection of how I can expect to get there. It is a rough approximation taking into account average market returns, savings rate and inflation, but it's a plan.

[jIM_Ohio]

A good financial planning process will likely follow these steps:

1) Set goals
2) Create a cash flow statement (list of income and expenses)
3) Create a net worth statement (list of assets and liabilities)
4) Assess situation and discuss each of the 3 in detail
It is VERY difficult to solve most problems without some understanding of all 3 pieces.
5) Prioritize goals
6) Create an action plan

As I see many different threads here, I am amused that most amateurs follow a similar process, with the biggest difference being how much time and detail is presented at step 1 and 3.

[feh]

We never really set goals; we simply lived frugally and saved/invested the rest.

Gonna retire at 50.

[rennigade]

Ages 31,30. Our financial goals for years have been to have a combined 1mil in our retirement plans by age 40 (401k/Roth.) Right now we 345,000. For the next 4 years we will be able to max our accounts, so thats an additional 184,000. If the market stays flat, we'll have 529,000 with 5 years to go. At that point we'll be moving and buying a home outright...but our salaries will decrease. So we probably wont be able to max our retirement accounts anymore. Im guessing we arent going to hit the 1mil mark by 40, it'll be close. (im not counting the equity in our home, its not an investment to me)

My other goal for years was to retire by age 50. I may push that to age 52 or 53 though.

[Scanner]

Divorce has taken a toll on me. Havne' really recovered financially to get to a place of goal setting.

Have had to raid my retirement savings to pay child support.

Just surviving.

[mrpaseo]

A good financial planning process will likely follow these steps:

1) Set goals
2) Create a cash flow statement (list of income and expenses)
3) Create a net worth statement (list of assets and liabilities)
4) Assess situation and discuss each of the 3 in detail
It is VERY difficult to solve most problems without some understanding of all 3 pieces.
5) Prioritize goals
6) Create an action plan

As I see many different threads here, I am amused that most amateurs follow a similar process, with the biggest difference being how much time and detail is presented at step 1 and 3.

Without manually working this out, I have done this list. I track it all in an excel workbook and review it almost daily. We make changes annually when we re-assess out goals/plans.

Good topic.

[BrokeGirlGetsRich]

I set goals on a yearly basis.

My goals for 2015 are:
1. save/invest 25% of my income towards retirement
2. figure out a budget & budgeting system that works for me

Without setting too many goals or getting caught up in big numbers, I feel like it frees me up to focus on the things at hand and take easy steps towards the outcome... for me, it also helps ensure that my goals get accomplished.

[scfr]

Part of a good financial planning process is setting goals.

I am curious how many people here write down their goals in a place other than this forum?

How many goals are on the list, and do you prioritize them?

Many people come to forum looking for help, yet I don't see concrete goals understood by the person asking questions or the people offering help. Thoughts?

Yes, of course! Many of my goals aren't things I choose to share on this site though.

What I know from personal experience and observation of others who have turned their financial lives around, setting concrete goals isn't always the right first step. Sometimes you have to just take a couple little first steps before you can get a sense of what is possible. Only then can you begin formulating goals.

To shift gears, I have noticed that as time has passed, my mid-term financial goals have disappeared. No more need to save for a down payment or pay off the mortgage, no more need to save for a car, etc. All goals are long term savings goals (retirement number, etc.) or short-term spending targets ($xx this year for vacation, re-landscaping, whatever). In my 30's mid-term financial goals were front & center. Not any more. My mid-term goals now have nothing to do with finance. I wonder if others have experienced this. I assume it's just a natural phase in anyone's financial life.

[CrisAdams]

Setting Financial Goals

Financial goals vary each year. One way to set financial goals, is to create an excel Financial Goals Worksheet that lists your short term goals (less than 6 months), Medium goals (6 months to a year) and Long Term goals (over 1 year). Estimate the cost, target date, how much you need to save then work that money into your budget.

Remember to be realistic and prioritize your goals if you have many to accomplish. Revisit your goals each week to see if you're on track. If you have a set-back, target a new date and keep going.

[jIM_Ohio]

Without manually working this out, I have done this list. I track it all in an excel workbook and review it almost daily. We make changes annually when we re-assess out goals/plans.

Good topic.

I set goals on a yearly basis.

My goals for 2015 are:
1. save/invest 25% of my income towards retirement
2. figure out a budget & budgeting system that works for me

Without setting too many goals or getting caught up in big numbers, I feel like it frees me up to focus on the things at hand and take easy steps towards the outcome... for me, it also helps ensure that my goals get accomplished.

Financial goals vary each year. One way to set financial goals, is to create an excel Financial Goals Worksheet that lists your short term goals (less than 6 months), Medium goals (6 months to a year) and Long Term goals (over 1 year). Estimate the cost, target date, how much you need to save then work that money into your budget.

Remember to be realistic and prioritize your goals if you have many to accomplish. Revisit your goals each week to see if you're on track. If you have a set-back, target a new date and keep going.

Yes, of course! Many of my goals aren't things I choose to share on this site though.

What I know from personal experience and observation of others who have turned their financial lives around, setting concrete goals isn't always the right first step. Sometimes you have to just take a couple little first steps before you can get a sense of what is possible. Only then can you begin formulating goals.

To shift gears, I have noticed that as time has passed, my mid-term financial goals have disappeared. No more need to save for a down payment or pay off the mortgage, no more need to save for a car, etc. All goals are long term savings goals (retirement number, etc.) or short-term spending targets ($xx this year for vacation, re-landscaping, whatever). In my 30's mid-term financial goals were front & center. Not any more. My mid-term goals now have nothing to do with finance. I wonder if others have experienced this. I assume it's just a natural phase in anyone's financial life.

I would suggest goals and actions are NOT the same.
1 action could fund or enable multiple goals
1 goal could need 4-5 actions needed to achieve.

For example annually tracking something is more measuring progress towards something, not the goal in and of itself.

If goals change each year, I would suggest the right goals are not in place- because goals should be longer than a year (like retirement), with some shorter term (like vacations annually or a new car each decade).

I would also say setting goals before taking actions is important. People could LBYM and not have enough goals to feel fulfilled.


My goals
1) Retire by age 55.
2) Send kids to college when they turn 18 (and I turn 53)
3) Pay cash for my next car (a Tesla)
4) Increase income

The action plans for that include

a) save 30% of income (enables 1-2-3)
b) build a rental business in my community (enables 1-2-3-4)
c) pay down debt from marriage gone bad (enables 1-2-3 and indirectly creates 4)


Notice none of the goals have dollar amounts. I don't know what I need to retire at 55, it is a goal, and I save a lot to achieve it, but its a SWAG at best if saving 30% meets the goal. My estimates suggest $600k in todays dollars are enough, but no way to know if 30% meets that.

I have milestones for some of them. $300k by age 47 should be enough to be $600k at 55. Tesla requires I add about $1600/mo to savings, kids to college is an unkown number, but meeting goal #4 will likely enable all the goals above it (if my income increases to $200k most goals are fully funded very quickly).