How to Iron Yours Out for 2022

I once gave a presentation to a group of (unfortunately disgruntled) staff on goal setting and received feedback on the topic (not on my presentation skills, although they do probably referring to both):

• “Goal setting is boring.”
• “I like living in the moment.”
• “Bouheur.” (Yes, there were several overlapping comments.)

The American Psychological Association has found that in 2021, money is a high stress level and “significant enough” for 61% of Americans. So why not implement personal financial goals? If planning for the future can help reduce financial stress, why not take care of it by setting three types of personal financial goals?

Let’s go over the short, medium and long term financial goals so that you achieve exactly what you want, whether you want to start investing in cryptocurrency or budget for the first time.

Three types of personal finance goals

The Financial Sector Regulatory Authority (FINRA) has already made it easier for you by identifying three types of financial objectives:

• Long-term financial goals: Long-term financial goals typically take more than 10 years to achieve and can refer to saving for retirement or paying off your mortgage.
• Medium-term financial objectives: Medium-term financial goals typically take three to 10 years to achieve, and may include savings for the down payment on a home or savings for starting a business. Medium-term goals may also involve savings costs for college (depending on the age of your children).
• Short-term financial goals: Short-term financial goals should take less than three years to achieve and may include savings for basement renovations or for a vacation.

Setting very clear deadlines on all the goals you want to achieve will help you identify concrete steps to get there. But how do you do that? Let’s find out.

How to set financial goals for 2022

Let’s go through each type of financial goal one at a time so that there’s no doubt about when and how you want to achieve a goal.

How to set long-term financial goals

Setting long-term financial goals doesn’t have to be intimidating, although you might feel like you’ve been given a monumental task to chart your entire life on paper. Here’s the deal, though: if you think of it this way, you’ll always feel overwhelmed!

• Step 1: Start by writing down exactly what you want to accomplish over the next 10 years. You might want to retire in Florida, save $ 2 million, sell your house, etc. Think carefully about what you want.
• 2nd step: Write down what it takes to get there. If you have no idea, do some research on what you need to do to make it happen. If you need help achieving your long-term financial goals, hire a financial advisor to help you reach them.
• Step 3: Put together the right types of assets to make it happen. For example, if you need a stock-rich IRA to make your $ 2 million dream come true, put it together.
• Step 4: Put your plan in place, automate your investments to automatically contribute each month and monitor them over time.

Can’t find everything you want to do beyond 10 years? Its good. If you’re saving for retirement first, you can always add goals to your list later.

How to set medium-term financial goals

Setting medium-term financial goals can seem a little more confusing. After all, it can be difficult to determine exactly what you might want in three to ten years. You might want most of the “stuff” sooner than that!

• Step 1: Think about what goals you might have in three to ten years and write down as many as you can. Maybe you want to pay off your debt or make more money. Maybe you have some upcoming milestones in your life – a big birthday or an upcoming anniversary, for example.
• 2nd step: Identify medium-term investment options that could get you where you want to be. You may want to put them in less risky investment options so that you can benefit from them when you need them. Many people will continue to place medium-term investments in well-placed (but diversified) stocks, certificates of deposit (CDs), corporate bonds, and other types of accounts. You can also choose methods that can help you, not investments at all. For example, you can choose the snowball method of getting rid of credit card debt (where you pay off your credit cards at the highest interest rate first).
• Step 3: Automate your investments and monitor them to know their performance.

How to set short-term financial goals

Short-term financial goals are obviously the goals you’ll set for yourself so that you can access the money fairly quickly. You will want to be able to access the money within three years. Here’s how to do it:

• Step 1: Write down any short-term financial goals you want to achieve (even if they don’t require opening an investment account). For example, maybe you want to create a budget, create an estate plan, add to your retirement accounts, or earn more money. You can also write goals that To do require you to create a fund, such as setting up an emergency fund.
• 2nd step: Determine how you are going to achieve all of these short-term goals. Make your plans as clear as possible. For example, you might say that you want to create your emergency fund by putting 5% of your money in a money market account. Or maybe you will start looking for a side activity that will go straight to your investment account or ask your boss for a raise.
• Step 3: This step always involves the follow-up process! Implement your plan and follow it to completion.

Get your financial goals on track in 2022

Goal setting doesn’t have to be exhausting. Just spend an hour thinking carefully about your goals and doing some research before the New Year. If you have a spouse, loved one, or family members who might want to participate in your brainstorming session, let them do it. It can be a very productive way to plan for 2022 and your future.