Setting Long-Term Goals

Where do you want to be?

Every journey begins with a single step.  But where do you want to go?  Envision a day when you are at your best – what are you doing? Where are you?  Who are you with?  Look for the broad themes as well as the details of what this day looks like.  This vision should excite and motivate you. It should give you the materials to make your goals a reality.

Translate your abstract dreams into concrete goals

You must have a destination in mind in order to reach it. Goals are destinations. Since you may have many goals, it may be helpful to break them down:

• Short-term goals:  These are goals that you can accomplish in under a year.  They might include setting up an emergency savings account, getting a handle on your monthly debt obligations or saving for a trip.
• Intermediate goals:  These are goals that you can accomplish in one to five years.  They take more planning and most likely will take quite a bit of saving.  They might include continuing your education, buying a car or purchasing a home.
• Long-term goals:  These are goals that will take more than five years to accomplish.  Saving for retirement is a likely long-term goal, as it will take decades to save what you will need to enjoy your golden years.  Other long-term goals may include getting married and having children.

To achieve your goals you must break them down into action items.  One effective tool in assessing the likelihood of achieving your goal is to break it down into manageable chucks, using the SMART Goals framework.  SMART stands for:

• Specific – clearly define your goal, including a timeframe for achieving it.
• Measurable – if your goal involves a financial commitment, you can measure progress by how much you have saved toward it.
• Attainable – is acheving your goal more important than the time, effort, and money it will take, compared to all of your other obligations and priorities?
• Relevant – why do you want to reach this goal? What is the objective behind the goal, and will this goal really achieve that?
• Timely – assigning a deadline for your goal will motivate you and keep you accountable.

Another way to achieve your goals is to talk about them. Telling others about your goals makes it more likely that you will achieve them. Use your social networks to communicate your goals and describe the actions you are taking to achieve them.  By making them public, you are creating accountability to others and some positive peer pressure to stay the course.  Think of all your fans cheering you on to success!

How frequently should you check in on your progress?  That depends on what motivates you.  You may want the comfort of weekly or monthly check-ins to chart your incremental grow.  Or maybe frequently watching small amounts of progress doesn’t give you that lift that you are looking for. Instead, chart your progress every three or six months, whatever gives you the boost that you need to keep going.

How Can Financial Products Help You Achieve Your Goals?

Once you have set SMART goals, you'll want to put plans in place to acheive them. If achieving your goals includes saving money, you may want to set up separate savings accounts for each goal. By separating your saving into different buckets, you will be able to track your progress for each goal more easily.  This allows you to also take advantage of longer term saving or investment vehicles.  For example, you can save in different products based on your savings timeframe:

• For short-term goals:  Savings accounts, money market accounts
• For intermediate goals:  Certificate of Deposit (CD), Short-term bond funds
• For long-term goals:  Index funds, Exchange Traded Funds (ETF)

Achieving a goal can bring with it an enormous sense of satisfaction.  And that can spur you on to the next goal and then the next, making you feel empowered and independent.