Throughout all aspects of your life, you likely have goals, aspirations, and dreams. From career goals to workout goals, travel goals, family goals, and more, you have at least an idea of what you want your life to look like.
Yet, regarding financial goals, people tend to feel uncertain about what they should work toward. Setting and achieving financial goals can often feel overwhelming or impossible —but that doesn’t mean you should dismiss them altogether.
Why? Because financial goals are the foundation of your financial plan, they impact your entire financial journey. If you’re anxious about setting financial goals, here is a step-by-step approach to consider following.
Step #1: Start With What’s Important
The first step is to identify what truly matters to you in life. Then, based on your personal values, aspirations, and vision for your ideal life, set your financial priorities.
Rest assured, there is no right or wrong way to establish your goals, meaning they’re meant to be as unique as you are.
If you’re charitably minded, perhaps you’d like to set a philanthropic goal, such as donating a certain amount each year to your favorite charity. You may also want to establish your own foundation, scholarship, or non-profit organization in retirement.
Many families with children want to build and transfer generational wealth to their children and grandchildren, which requires ample planning and strategic execution.
Step #2: Complete the Perfect Life Exercise
At Mission Street, we encourage clients to establish their financial goals using the “Perfect Life” exercise.
To start, picture in your head what your perfect life looks like. Then, with that vision in mind, ask yourself three questions:
- “Where am I?”
- “Who am I with?”
- “What am I doing?”
Once you’re able to answer those questions and gain clarity on what your perfect future life looks like, you will have the framework necessary to start creating your financial goals.
Step #3: Use Your Vision as a Guide
This vision of your ideal life should drive the decisions you make about your money. That way, you can more effectively work toward your picture-perfect life.
Just like driving a car with a GPS, these goals give you specific directions regarding what to prioritize, how much to save, where to invest, and more. Without them, how can you tell you’re making the best decisions about your wealth? (Unfortunately, you can’t).
#4: Get Feedback and Guidance
Your goals and dreams will likely evolve, meaning the Perfect Life exercise is something you can return to time and time again.
In addition, you may want to work with a financial advisor to determine whether your goals are attainable or if you need to adjust them to better align with your current financial situation.
On the other hand, your advisor might encourage you to dream even bigger as they help you navigate your financial journey. People often underestimate how much they can achieve financially when they have a thoughtful, forward-focused plan.
Using the Perfect Life Exercise to Identify Your Goals
If goal-setting is intimidating, you can start pretty quickly with just a few quick steps—identify your priorities, complete the perfect life exercise, refocus your spending and saving habits to support your goals better, and ask others for feedback.
In doing so, you’re more likely to succeed in aligning your financial habits with your life’s passions and vision for a perfect life.
To get a financial professional’s second opinion on your goals and financial journey so far, we encourage you to reach out to our team and schedule time to talk.
