9 Steps to Becoming Financially Fit in 2014-Part 3 of 6

The most important step towards becoming financially fit is to set clear financial goals.


Step 4 Set Clear Financial Goals

 Having discussed the first three foundational steps, it is time to set your financial goals. Regardless of what life stage we are in, we all need to have financial goals. If you are part of a couple, it is important that you and your significant other are on the same page regarding your financial goals.

What is most important to you? Before you get started, take a minute to visualize what your life looks like after you have achieved your financial goal.

Whether your goal is to take a once in lifetime vacation, retire or to create an emergency fund, you need to estimate how much money you need to fund the goal. Because you likely will have multiple goals, it is also important to prioritize them.

Here are three factors that determine your financial goals:

1. Your Priorities (your values and beliefs)


  • Independence
  • Quality of life
  • Early retirement
  • Give to a charity

2. Your Responsibilities (items part of your monthly cash flow)


  • Children’s education
  • Support for elderly parents
  • Car loans

3. Your Dreams (your vision and aspirations)


  • Second home
  • travel
  • Jewelry
  • Leave a legacy

As you go through the process of setting and prioritizing your goals, take all three factors into consideration. It may be helpful to use a goals worksheet. Your goals should be SMART (specific, measureable, achievable, realistic and time bound).

 Setting Goals is a Process

The most important step towards becoming financially fit is to set clear financial goals. It helps you to know where you are headed. But goals are not static and may change over time so it is important to revisit them on a periodic basis.

Call to Action:

One Week-Sit down in a quiet place and take some time to set at least two SMART financial goals.

What’s next?

Next week, I will discuss step 5: Organize your recordkeeping.


About Pamela Plick

Pamela Plick is a CERTIFIED FINANCIAL PLANNER™ practitioner and Registered Investment Advisor located in Palm Desert, California specializing in planning for women. Her goal is to empower, educate and engage women around their money. You can find out more about Pamela and connect with her on twitter, Facebook or linked in by going to www.pamelaplick.com.
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