When creating a budget, it's important to come up with a set of goals as this will help dictate where and how your money needs to spent. However, you need to make sure that the goals you're setting work for you. Here are some examples of bad money goals and what you can do to make them a good goal.
OUT OF YOUR CONTROL
Selecting a goal where the final result is out of your control may set you up for never accomplishing it. For example; setting a goal to earn more money by receiving a promotion at work. At the end of the day, no matter how qualified you are, the decision on who will receive the promotion is ultimately up to someone else.
WHAT TO CHANGE: Using the above example, instead of making the promotion your goal, make improving yourself as an employee the goal. Whether it’s expanding your education or learning different aspects of your business. These are all things that you can ultimately control and if it doesn’t lead to a promotion in your current workplace, it could make you a valuable asset elsewhere.
When your goals are too vague it makes them harder to accomplish. For example, setting a goal to ‘save money’ is too vague and it may make it difficult to achieve it.
WHAT TO CHANGE: Make your goal specific. This could be ‘save $10,000 in an emergency savings account’ or ‘pay off your high interest rate credit cards.’ The more specific the goals are, the easier it will be to create a plan to achieve them.
Having too many goals will split your focus which will most likely result in accomplishing little to nothing.
WHAT TO CHANGE: Start off with three goals: one short-term, one mid-term goal, and one long-term goal. Make sure they are specific and you have a plan to achieve them. Once you reach a goal, start another one. You should always be working towards something so you don’t lose focus on your long-term goals.