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How to set financial goals that work in 4 Steps

Think about how much you are worth before you set any financial goals. You cannot set financial goals before you value your own worth.

1. Determine how much you are worth

So maybe you want to set a New Year resolution or perhaps you have decided to create new goals for yourself in terms of what you need financially. You cannot be inspired to change your life until you have decided to review your own worth. Think about it in this way, when you know how much you are worth it will be easier to set a real target that has an impact on your life. So maybe you own the following items
• Car $5,600
• Household furniture $7,000
• Phone $250
• Anything else $400
This would mean that you are worth $13,250? Not really, think about your monthly rentals and other expenses. So if you were a company your operating or living expenses would be
• Rent $500 a month
• Food $300 a month
• Education commitments $350 a month for the next 2 years
• Bills $200
Repair and Maintenance per year would be $500
Meaning that your total outflow per year would be =(500*12)+(300*12)+(350*12)+(200*12)+500=16,700
Provided that you were to sell everything that you own your assets would only cover you for (13,250/16,700)*12 months=9 and a half months in a year. So in real essence you are worth 10 months or less.

Please note that  this is a very simplified example and we have left out aspects on inflation, your salary e.t.c to keep it basic and easy to understand

2. So now you can make an informed financial goal

As you now know how much you are really worth, you can now make your financial goal. Do you want to buy a house worth 100,000 dollars or do you want to buy a couch worth 2,000 dollars. So  now you can make an informed financial goal. Choose according to the following
• What you are worth at the moment
• What you want to be worth In the future
In this aspect you must think carefully and combine this step with the next step

Also read how to save in 21 steps

3. What are you prepared to do, seriously

Anyone can think of a number and say this is what I am targeting for that year or period but not everyone will achieve the target. There are four questions you must ask yourself before you go for your financial goal
• Do I have control over it
• Am I prepared to sacrifice for it financially
• Will I find time to do it
• Does my resource have commercial value

4. Track yourself and be accountable

If you have successfully set your financial target it is now time to go for it, however you must track yourself. This is important as it encourages a structured way of checking on yourself.

If you can do these four things then you are well on your way. This article is taken from our success program “Your Success 101” which is a success program to help you.

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