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Defining and Setting Goals for a Good Financial Life
Defining your financial goals can be difficult, just like reaching them. Also, defining your goals can be a process and they may change over time. Let's start with some general ideas that could be the definition of a good financial life.
Some of the long term goals that many people list include:
But there is more to a good financial life than just long term concrete goals that can be calculated. There are short term and intermediate term goals that should be taken into account.
There are also intangibles that should be considered.
The benefits of patience and time
Learning to manage your finances intelligently can be different than learning most skills. Learning to ride a bicycle is relatively simple - you get on, you balance yourself, you pedal, you turn and you brake. There are very few variables. With your finances, there are many variables and those variables change over time. You have different jobs and income levels, your expenses change and there can be unexpected expenses, certainly the investment markets fluctuate, the tax rules change and your goals change. Some of these changes you can control and others are beyond your control.
In addition, our minds are not naturally accustomed to thinking about finances the way we need to. We all tend to want immediate gratification and to believe we are in control of all aspects of our lives. Achieving financial goals, whether they are long term, short term, or intangible requires that we make decisions that balance short term and long term priorities.
The good news for young adults is that all of the tools needed to achieve your goals are available. The information you need to improve your financial literacy is readily available; you have access to all the products and services you need and time is on your side.