The Need to Set Goals
Any company has a mission-vision statement. It sets the goals so that everyone working there will know the direction they are taking. Even if the nitty-gritty details on how to get there are taken care of in meetings and/or voluminous documents, the mission-vision statement serves as the roadmap to get there.
You also need goals when you’re mapping out your financial success. Without a clear goal, you’ll realize that it’s impossible to move forward. Without an objective, you won’t be able to achieve the financial security you have always longed for. Goal-setting is an integral part of financial freedom. When you know where you are going, you do your best to do what you need to do to get there. No matter how challenging that road is, you already have a beacon of light guiding you to success.
Think about going on a vacation to an island you haven’t been to before. You saw the beautiful pictures and that’s why you were tempted to book a week there. What do you need aside from money and your best swimwear? A map, of course. Without it, you won’t be able to navigate your way around the place. You’d be at the mercy of people who might genuinely help you or take advantage of your ignorance and overcharge you by taking you from the airport to your hotel. With a map and some knowledge of the area gleaned from reading a respectable guidebook, it is possible to get there yourself without paying too much.
The same is true for money management. When you are able to outline your goals, you know where you’re headed. You know that you can build a healthy nest egg for yourself and secure your future if you work at following your goals. And for you to do that, you need a plan.
Having a plan gives you focus. This is one of the most crucial things when it comes to goal-setting. Once you have outlined your goals, you need a plan to help you get there. Plans can be as simple as putting 10 percent of your salary in a savings account each payday or it can be as complicated as paying your debts, allocating some of your money in savings accounts, investing others, and getting a second or even third job to help you accomplish it. It really depends on your personal circumstances.
When it comes to goal-setting and planning your personal finances, it’s never too early or too late to start. But the earlier you begin with it, the better. For example, if you start saving and investing when you’re in your twenties or thirties, the power of compound interest will work wonders with your money and you will be amazed at how much it has grown compared to how much it would grow if you begin a decade later. When it comes to saving and investing, time can be your greatest friend, especially if you start early.
However, even if you have only realized the importance of saving when you’re in your fifties, keep in mind that it is never too late to start. You may not save as much as the one who started earlier but you will still have something set aside.
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