Setting financial goals is the single most important thing you can do to take control of your finances. Your life can’t go according to plan if you don’t have a plan. You will continue to spend every penny you earn if you don’t plan for where you want that money to go.

Now more than ever we have to plan for our own futures. Approximately 70 million baby boomers will reach retirement age within the next 10 years. That is going to put an enormous strain on the already strained social security system.

Alan Greenspan, Chairman of the Federal Reserve, has stated that in order to keep this strained system going, the retirement age will have to be raised or the benefits will have to be cut back. The ever ballooning Federal Deficit is the main cause.

It would be my guess that both of those things will happen and more. If social security is even around in another ten to twenty years, I’ll be surprised. The government’s plans for it are kind of up in the air right now. The President would like to have us invest our own contributions. I would imagine that a program like that will take quite a bit of time and money to set up.

If you are looking at those social security statements you get every year a few months before your birthday, and making that part of your future financial planning by expecting that money to be there, you could be left holding an empty bag when you reach retirement age.

There was a time when our parents and grand parents could survive on their pension and social security and have it pretty good. Especially, if their homes were paid off. This is no longer true.

Many companies do not give pensions anymore, they have 401K plans instead. Due to inflation and an increasing amount of consumer credit card debt, many people do not contribute as much as they should or they make withdrawals when the have a problem come up.

It is for this reason that setting financial goals and having a plan to work toward, is so important. You need to set short term, medium term and long term goals.

The short term goal might be paying down your credit card debt, the medium term goal might be planning that family vacation you’ve always dreamed about but could never afford because of the debt, the long term goal might be a certain dollar amount set aside for retirement or that piece of property that you want to build the home you want to retire to on.

In order to start setting goals you need to ask yourself some questions. You also need to be realistic. If you set the goals too high at the beginning, you won’t stick with it. You can always raise each goal and set new ones as you reach them. You won’t do that if you set them too high at the beginning and then give up because they were totally unrealistic and unreachable.

If setting goals in new to you and you don’t have any idea where to start, get a piece of paper out and make a wish list. Again, be as realistic as possible. If you are only making minimum wage and your wish is to buy a BMW or a Jaguar in the next year and you already have other expenses, it’s not going to happen unless you also plan on increasing your income.

When you are making your wish list, you should also write down in how many years you would like to see it happen and approximately how much money it will take to fulfill this wish. Then decide the order of importance of your list. Which wish you would like to work on first, next etc. If you are single, this is your starting point.

If you are married or have a partner, you should both work on your own lists. Then you should compare them and make compromises so you can both get as much of what you want as possible. Then work on the order in which you will work on these goals.

The most important step in setting goals is implementing them. Making a list is fine, but if you stick it in a drawer with your paperwork and forget about it, it won’t do you any good. They have to be something that you really want and are willing to make changes and adjustments in your life in order to set money aside for them.

A dream will always be just a dream if you don’t have a plan of action to turn it into a goal and then to make that goal a reality. You need to keep that list with you or keep it where you can see it a few times a day. Look at it as often as possible. Keep thinking of where you are now and where you want to be in the future. Think about what it’s going to take to get there and the ways that you can accomplish those goals.

You don’t get a promotion or a raise at work without putting in the effort to prove you deserve it. Your dreams will not turn into reality if you put them someplace and forget about them. You have to be willing to put the time, effort and motivation that you use in other things into making your financial goals come true.

You can face your financial future and make it better. Whether your finances are in okay shape and you would like them to be better or whether you are having temporary difficulties. You just need to have a plan and the determination and desire to follow it through.

Part II of this article is going to cover questions you need to think about to start the goal process and more questions you should consider when you are starting to implement your goals into your budget.

About the Author

Author: Teresa Kaufman
Owner/Creator: http://www.yourdollarsandsense-budgets.com
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