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We have just started the second half of 2016 and it is the right time for you to review the financial goals that you have set for yourself. A lot of people set New Year’s resolutionsand according to Time.com, 2 out of 5 of the top resolutions are related to finances. 30% vowed to save more and spend less while 27% will focus on paying down their debts. Regardless of the type of financial target that you want to achieve this year, it is important to conduct a mid-year review to make sure you are right on track. Some people end up failing to meet their goals because they lack the will to follow through with their plans. If you are serious about your intentions to improve your financial position this 2016, you need to find the time to review your financial goals.
6-steps to follow when reviewing your financial targetsReviewing your financial goals may seem time-consuming but it is a necessary step to take - at least if you are serious about meeting your targets. Sometimes, if you do not make this review, the importance of the goals you set at the beginning of the year will wane. You might lose interest and give up on it. While it may seem irrelevant already, a review will allow you to double check if you really want to give up on the goal or not. There may be a need to cancel a goal because a better opportunity is up for grabs. You will never know unless you review your money targets. Some people think that this review is complicated - but in truth, it is not. You can accomplish this easily if you follow these 6 simple steps. Step 1: Review your list. Start by looking over your list. If you were serious about your financial goals at the beginning of the year, you should have written it down. At the very least, you should have placed it on your phone to remind yourself of the financial plans you have this year. In case you do not have this list, now is the right time to write things down. More often than not, failing to write your goals mean you have made very little progress on it. Worse, you may not have started on it at all. Writing down your goals will give you a sense of commitment to the project. Step 2: Check your progress. As you are looking at your list, you need to check if you have made progress on it. For instance, if part of your financial goals include paying off your student loans, calculate how much you have paid since the beginning of the year. Is it going as planned? Or did you miss out on payments? Maybe your progress is better than you thought? Make sure you list the specifics of the progress you have made - or any lack thereof. If anything, this can help motivate you to completely reach your goal. Step 3: Analyze the changes that happened so far. After looking over your list and identifying the progress you have made, you may want to analyze the changes that happened in your life. This time, you need to look beyond your finances. Look at your family and see if there are needs that came up since the start of this year. What about your job? How have things changed in the workplace? Do you have a sudden urge to switch careers? What about purchases? Is there are need to buy something that you did not have before? Step 4: Determine if your priorities changed. It is a fact that our priorities change as we age. An article from USNews.comdiscussed how the priorities of retirees change because their lifestyle changes along with it. The same is true for all age levels. As we get older, we go through changes that affect our perception of what is necessary and important. With all the changes that you encountered since you first listed your financial goals, you need to identify if they affected your priorities. In case your priorities changed, you need to check how this will affect your targets. In case the changes will not influence any of your priorities, then there is no harm done and you do not need to change anything about your targets. For instance, your car broke down just as you are trying to save up for the deposit on a house. Your home buying requirements might have to take a backseat because your priority will now be focused on your car expenses. Step 5: Decide if you will implement changes or not. Although the changes in your life may have altered your priorities, it is still up to you if you will let these affect your financial goals. For instance, if your car troubles can be fixed without altering your down paymentsaving targets, you can opt to sacrifice something else from your budget. Or you can choose to use the down payment you saved so you can buy a new car or have it fixed. You can always start saving again. You just have to alter your target to accommodate this change. You should also be careful about the changes that you will make. Remember, our priorities change over time. That means the changes that you may want to implement now may no longer be relevant in the next few months. Think carefully if you really want to divert from the initial path that you were trekking in the first half of this year. If your priorities changed because of emotional factors, it might not be a good basis to alter your money goals. Emotions can be misleading - so try to make decisions based on logic rather than your feelings. Step 6: Implement the changes. The final step is to implement the changes according to how it influenced your priorities. Make sure you either revise the old list or you create a new one. It is important to note what the changes are so you can revert to the old - in case you feel that you made a mistake in altering your initial path. Of course, regular reviews like this one will help ensure that your financial goals will always reflect your best interest according to the present circumstances.
Tips to help you commit to your money goalsMost of the time, setting and reviewing financial goals is not the real challenge. People oftentimes fail at their money goals because they lack the will, discipline, and motivation to complete the task that they started. Here are tips that will help you stick to the financial goals until you have successfully completed them.
- Create specific and time-sensitive goals. If your goal is vague or does not have a deadline, you will lose interest in meeting it. The sense of accomplishment will be lost because the definition of the goal is not clear.
- Have a visual representation of your target. PsychologyToday.comrevealed that our brain is more of an image processor. This is why a visual representation of your financial goal will motivate you to reach it. Post a photo of your dream house, vacation, or a debt-free life. Having these images in a highly visible place will motivate you to stick to your financial goals.
- Set up milestones. This is actually applicable to goals that you know will take a long time to complete. For instance, if you are paying off a student loan debt that is worth $30,000, you know that it will take years to complete. You should divide this goal into smaller targets - for instance, every $5,000 mark. This will help make the goal easier to accomplish because the milestones will take a shorter time to complete.
- Reward yourself after every milestone. To increase your motivation, you should think about small rewards to celebrate milestones. That way, you will feel a sense of anticipation for the next milestone and you will work hard to complete the next one.