| One useful trick when setting financial goals is to break | | | | yourself on track. This also means that your annual |
| up your larger goals into smaller "stepping stone" goals. | | | | milestones also have to be readjusted. This is one of |
| For intermediate financial goals (ones that will take | | | | the problems with long-term financial goals: the factors |
| three to five years to accomplish) and long-term goals | | | | involved are likely to change many times before you |
| (ones that will take more than five years to achieve), | | | | actually reach the goal and these changes have to be |
| this technique can be extremely helpful. | | | | taken into consideration. |
| The basic idea is to determine where you should be to | | | | By breaking your intermediate and long-term goals into |
| accomplish your financial goals each year and to | | | | annual milestones, it helps you keep track of where |
| develop a practical means of meeting these smaller | | | | you should be putting your money and also tells you |
| milestones. For intermediate goals, such as paying off | | | | how well you are progressing toward achieving your |
| credit card debt or buying a new car, you should have | | | | goals. If you fail to make your milestones, this tells you |
| a pretty decent sense of what you will need to realize | | | | rather bluntly that you will have to improve your money |
| these goals. Therefore, setting up milestones just | | | | management if you want to successfully accomplish |
| serves to illustrate how you are doing and provides | | | | what you want. Likewise, if you are making your |
| you with tangible proof of your progress. | | | | annual milestones easily, with lots of money to spare, |
| For long-term goals, such as sending your children to | | | | perhaps it is time to reassess how much you can |
| college or arranging a comfortable retirement, the | | | | dedicate to your financial goals and perhaps speeding |
| overall amounts required may change regularly; | | | | of the time table. |
| therefore, it is important to reassess what you need to | | | | This simple idea is very popular with people that have |
| reach your goal every year and determine realistic | | | | gone to the trouble of setting financial goals for |
| milestones for accomplishing this. | | | | themselves. The milestones can be considered |
| The bursting of the real estate bubble in 2007 provides | | | | progress reports and can help you make better |
| an extreme example of why this regular | | | | decisions about how to proceed in the future. You |
| reassessment is necessary. If you were counting on | | | | may learn that you are doing much better than you |
| the resale value of your home as an integrated | | | | anticipated, so you may have the opportunity to reach |
| element of your retirement strategy, then you probably | | | | your goals much faster. Just as likely, you may learn |
| took a hit in 2007 when real estate values collapsed | | | | that you are not doing as well as you should be and |
| over the span of just a few months. If this was the | | | | this should help you decide whether or not to reassess |
| case, the calculations you made in 2006 would have to | | | | your goals and the time tables involved. |
| be completely reassessed in 2008 in order to keep | | | | |