7 Easy-ish Steps to Achieve Your Financial Goals

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Okay, you’ve set your financial goals, or fitness goals, or personal goals, for 2009. You’ve recorded the list somewhere you’ll remember to check. Now what? Here are seven easy steps to help you achieve any goal, but especially financial goals.

Make Sure Your Financial Goals Are Reasonable
We all have grandiose goals – I’d like to save $4 million dollars for retirement. But that’s not on my list of financial resolutions is it? No, because unless I win the lottery (woo hoo!), I’m not saving $4 million in one year. The same goes for paying off debt – don’t set an aggressive goal to pay off more than you earn. Look at your finances and figure out what you can realistically achieve in a year, then add 10-20% to make a stretch goal.

Divide Your Goal into Pieces
Now that you have a reasonable goal, it’s still too much to accomplish right away. Take that larger goal and break it down into smaller weekly or monthly goals. If you want to lose ten pounds, set a goal of one pound a week. If you want to pay off $20,000 in debt, set a goal of $1,666 a month.

Budget for Your Goal
Now take those pieces and fit them into your budget. You may know, for example, that you have to attend a wedding in July and won’t be able to meet your debt goal that month, so trim it a little and add the difference to a month when you expect to have more money. Once you have it noted in your cash flow or monthly budget, you’ll be less tempted to blow the money on other things.

Announce Your Plans
For many people, it helps to have a buddy working toward the same goal. Unfortunately, this isn’t always possible with financial goals. If you have a spouse, you should work toward the goal together. However, even if you don’t have anyone to be your goal buddy, you should still announce your goal to someone who will help keep you on task. Not sure you know someone like that? Start a blog or join a social networking community where people will cheer you on.

Determine Your Rewards
For me, simply knowing I achieved a goal is reward enough, but some people need more. Determine a small reward for each step on the way to the goal, as well as a larger reward for completing the goal. For example, let’s say you download a lot of music. If you pledge to stop downloading music so you can pay off your debt, allot yourself $5 for downloads each month you achieve your step-goal. Set a larger reward, like a new iPod stereo, for the day you achieve the final goal. Your rewards shouldn’t be too extravagant, but definitely make them worth the effort.

Poke Yourself with a Stick
If you respond better to negative motivation, use a site like StickK to set a punishment if you don’t achieve your goal. Ask a friend to be your referee, or trust yourself to be honest. Either way, pledge to give money to a cause you despise if you fail. That ought to be enough to ensure you achieve your goal.

Stay on the Wagon
If you fail at your step-goal one month, don’t give up. Recognize that sometimes life intervenes, and then start again. Even if you don’t make it all the way to your goal, making it halfway is still better than not making it at all.

If you make your goals manageable and set up a system of accountability, you’ll have much greater success at achieving them than if you just set it and then figure it will work out. Trust me, I didn’t pay off $40,000 in debt just by saying I would do it. I had a plan, and that made all the difference. If you want to be accountable, go ahead and post your goal in the comments here. It’s a small step in the right direction.

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