Goal Setting
“Goal setting should not intimidate you,” says Ron Redfield, CPA, PFS, as he summarizes his helpful goal-setting tips. While financial in nature, these goal-setting ideas apply everywhere.
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Part 4: Goal Setting
Question by Steve Kobrin: Ron, my father has always preached the virtue of goal-setting, namely "plan your work, and work your plan." Tell us how this relates to personal finance. How important is it to use a personal financial planning sample, as a guide to personal financial planning, in general—in terms of personal goals for saving money—such as for retirement planning, for example?
Answer by Ron Redfield (continued):
Goal-setting is often a misunderstood process. Now that we've looked at some important
personal finance goals—of young individuals that must start
saving money and married couples that must start
retirement planning—let's summarize some helpful tips for good planning and goal-setting.
- Saving money should come naturally. There is nothing as important as saving money in a financial plan. If you have trouble saving money, you should consider "forced savings."
An example of forced savings would be to set aside a specific percentage of your salary each pay period. You should treat these savings in the same fashion that you treat other mandatory expenses such as, rent, mortgage, car payment, food, etc.
There is an excellent book that I often recommend. It is called The Richest Man In Babylon, by George S. Clason. It is an incredible story that teaches a life lesson in saving money. I recommend that everyone go to the library and read this book (or listen to it on tape or cd).
- Your "financial roadmap" does not need to be complicated, nor does goal-setting. It can be as simple (or as complicated) as your desire. But, if you make a simple plan, and you see it is not working, then consider a more detailed plan. A detailed plan would help you determine why your current plan is not working.
- Make sure you consider your risk tolerances for investing, as well as realistic portfolio returns, when planning to meet your future goals. Make sure you have contingency plans, in case your investment returns are less than you had planned for.
- Make sure you set realistic goals, and review those goals at least annually.
- Write down your plan and your goals. This gives you the ability to see your goals in front of you. And, by writing down your set goals, you will never change your goals other than by rewriting them.
- Consult with a financial professional. Try to do this once a year.
- If you are having trouble saving, try writing down all of your expenses as they are incurred. Perhaps you will see that—rather than going out to dinner three times a week—making a nice dinner at home, twice a week, will give a weekly savings of $100.
- Lastly, goal-setting should not intimidate you.
Next, let's look at a
personal financial planning sample, which you may use as a template for your own financial goal-setting and planning.
About the Author
Ronald R. Redfield, CPA, PFS, is available for a free consultation and sample portfolio based on your investment risk tolerance levels. And you're warmly invited to request a complementary copy of Ron's text on investment philosophy.
Please contact Ron by visiting him at Redfield, Blonsky & Co., sending him an
email, or calling him at 1 (908) 276-7226. Be sure and read Ron's latest commentary on financial investments, to keep up with market changes.
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