Defining your goals

As with anything else in life, unless you define your financial goals, with specific plans for meeting them, it's highly likely you'll end up wandering aimlessly from one purchase or financial crisis to another, leaving your financial future to random chance. You don’t want to do that. You want to achieve some comfort in life – if not for yourself, then for the people you care about and for those who depend on you. Financial Planners is important. But it seems complicated and daunting, doesn’t it?

There are no hard and fast rules for implementing a financial plan. The important thing is to do SOMETHING, and to start NOW.

One surefire way to get started is to do what you are in a sense doing right now: educating yourself!

Go to a book store and dive into the finance section. Take some books from the racks back to the coffee shop and learn all you can.

Surf the Internet – there's a wealth of sensible advice out there, and it's free. Learn as much about financial investments as possible.

With a little effort you can learn enough to make educated decisions that can possibly increase your net worth many times over. To do so you need to identify the right steps you need to take to achieve these goals. You need an action plan. And you need to put it to work.

Do you have SMART goals?

One goal-setting technique we love to use is the Smart System. That's 'smart' as in “Specific, Measurable, Attainable, Realistic, and Timed.” What exactly do we mean by this? Let’s take a closer look

Specific – i.e. are your financial goals clear cut? You don’t want to say something like "I want to have more money next year." Determine exactly how much money you'd like to have next year.

Measurable – i.e. can you quantify your goal? Well, since you've set a dollar amount, you've done just that. Say you want to save 5,000 dollars by the end of next year. That, my friend, is a measurable goal.

Attainable – i.e. do you make enough money to reach your newly-measurable goal? If your goal is to save 40,000 dollars by the end of the year and you only make $30,000 a year, you're setting yourself up for frustration. Set obtainable goals. Which leads us to our next point ...

Realistic – i.e. do you really think your goal is reasonable? Be honest. For instance, if your goal is akin to hitting the lottery. Make it realistic. Make it something you can do.

Timed – i.e have you given yourself a time limit? Without one you might very well end up in an indefinite, unmotivated haze with no end point in sight.

People perform long-term tasks best when the finish line is close enough to be seen. It's how we're wired.

 By setting a time limit you make it possible to be able to say to yourself, "Hey! It's the end of the year and I've met my goal!”

 Important caveat: make sure you review your progress as time passes. Look at your budget after each quarter to see how you're doing.

Some Budgeting Tips

Remember that budgets are essential in Financial Planners.

They're the only practical way to get a grip on your spending and make sure your money is being used the way you want it to be used and is helping you reach your ultimate financial goals.

Building a budget is easy

Creating a budget generally requires three simple steps:

1. Identifying how and where you spend all that hard-earned money you make.

2. Setting goals that take into account your long-term financial objectives.

3. Keeping track of all your spending so you stay within your guidelines.

Use software to save time

If you use a personal-finance program such as Quicken or Microsoft Money, their built-in tools can greatly simplify the budgeting set-up process. In addition to all the standard check-reconciling and reporting features, it's easy to set up a system of warnings to alert you when you're in danger of exceeding your budget limits.

One drawback of tracking your spending with a computer program is that it can encourage a degree of anal attentiveness that can drive you nuts after awhile. The trick is to concentrate on those monetary categories that mean the most to your financial goals. Leave the less-important aspects of your spending aside if you find yourself obsessing over them. Remember the big picture.

Beware of vanishing cash

Some practical advice: you'll see that most budgeting software includes a “miscellaneous” category. This should literally be less than 5% of your spending. If 80% of your spending is “miscellaneous” then you are not categorizing your expenditures properly.

Don't count on windfalls

When projecting the amount of money you can live on, don't include dollars you can't be sure you'll receive, such as fluctuating income that might include quarterly bonuses, performance pay, refunds, or investment windfalls. Budget what you can count on (if only more state governments operated this way).

Beware of spending creep

Once you start making money, keep in mind it is better to use those salary increases to save more. Don't start spending for luxuries until you're sure you're staying ahead of the ball game. And don't forget to factor in inflation.

Spending beyond limits

You are treading dangerous water when you overspend in your important budget categories. But if you do, you've got plenty of company. Most middle income families are spending more than they bring in. This doesn't mean they're all ready for the soup kitchen or the Poor House, but it's definitely a sign they need to make some serious spending cuts. Remember that credit cards are not a solution to spend more than you make. In the end, you limit your spending power because of credit cards.

Pay yourself

A nice budgeting trick is to only spend 90 percent of your income. If you do this, use the other 10 percent to save for your long-term financial big picture goals. You'll be surprised how that extra cash will add up.

Summary

Tamworth Financial Planners starts with budgeting and having smart goals.

If you want to achieve any kind of financial goal – long term or short term – take the first step of finding out where your money is going, because chances are you don't know the answer to that question right now.

TAMWORTH Financial Planners is also about having “smart” goals.

Be on the same page with your spouse.

There are tools to help you get started budgeting and setting “smart” financial Planners goals.

The most important thing of all, of course, is this: get started! .

Learn how to budget. Establish smart goals. Take that first step!

Good luck on your new journey.