It’s hard to make a plan for your finances when you don’t know where you’re going. That is why it’s important to set financial goals. It’s even more important when you’re in the military because with military life comes lots of transition. When you’re in the constant state of transition, it makes it difficult to plan for anything let alone your money. Taking the time to set your financial goals will make it easier to make a plan of action to reach them.
How do you pick your financial goals?
It may sound crazy but start with your daydreams. The only difference between a goal and a dream is writing it down and taking action. You can sit around and daydream about how your financial life could be, but that isn’t going to make it a reality. There needs to be action to make it happen. Start with your top two money daydreams. Is it to be debt free? Is it to have a beautiful “forever” house? Once you have them, write them down.
Make a plan
Now you need all the details to help make a plan of action. Based on your goal, how much is that goal going to cost? If you want to get out of debt, how much debt do you have? If you are saving for your dream house, how much do you want to save for a down payment? Do a little research if you aren’t sure how much your goal will cost. Once you have the number you’re working towards, you’ll want to create a budget to calculate how much you can save each month. If you don’t have any extra money once your budget is complete, look at cutting some of your monthly costs such as going out to eat or entertainment money. To reach your goals, there will often be some sacrifices.
How do I reach my goals?
Now that you know where you want to go and how much it’s going to cost, you have to make a plan to get there. Here is where S.M.A.R.T goals come in.
Specific-What is your goal? Is it to save $2,000?
Measurable-Can I measure how much I’m saving each month?
Attainable-Is it possible to save that amount of money in a certain time?
Realistic-Is this a crazy goal or one that can really happen?
Timely-When do you want to accomplish your goal by?
Using the acronym S.M.A.R.T can help you fine tune your goals and help ensure they become a reality.
Plan for setbacks
Even the best-made plans will hit some bumps in the road. There will be things that happen that throw off your savings plans like family emergencies or an unexpected PCS but don’t let setbacks derail your goals. You’ll need to adapt and overcome those setbacks. Adjust your budget to cover any unexpected costs, look for other areas such a Netflix or Amazon Prime memberships to cut additional spending until you’re able to get back on budget. When setbacks happen, look for solutions not for reasons to quit. Keep working towards your goals.
With military life, transition is inevitable. You don’t want to keep delaying your financial goals. The sooner you start making a plan for your goals, the sooner you’ll be on your way to reaching them.