August 30, 2011

What are your financial goals? A strategic plan will help you get there.

Seeing that God holds us accountable for how we use His money, it makes sense that we should spend time asking Him for wisdom in how we are to use what He has entrusted to us.

Prayer is the first step in successful financial planning!

After prayer, the second step is setting goals that are both challenging and realistic. For example, I could set a goal to save a dollar a day, or give a dollar a day, but that would not be very challenging. A more challenging goal: to increase one’s giving from the current 2% to 3% (a national average) to 8% to 10%. Whatever they are; set goals that will take a reasonable measure of discipline to accomplish without being unreachable.

Third, make sure your goals are measurable. You need to keep track of how you’re doing in a particular financial area. A good guideline for measurability is to tie your goals to personal responsibility. What is it that you can control regarding your finances? You can control spending, saving, and giving so what will you do in these areas? It is much harder to control what your investments will earn from year to year, so to say I want to earn 25% on my investments is really not a good measurable goal.

Once you’ve prayerfully set challenging, realistic, measurable goals, write them out. This fourth step enables you to continually review those goals as often as you need to, to ingrain them into your financial mind-set. It’s easy to record these goals on your computer, phone or IPad. Whatever works best for you …do it!

The final step of effective financial goal-setting is keeping your goals dated, so you can determine where you need to be financially in six months, a year or however long from now. This will help you keep your progress and evaluate your goals. You can take this whole goal setting one step further. Use a certified financial planner (CFP) or someone who is like-minded to help you stay accountable to your goals!

Doing these five things with your finances will go a long way to getting your financial house in order.

In the next Dollars and Sense article we will take a look at the importance of establishing a budget and some specifics of a budget.

– Article contributed by Tim Chastain, Director of Men’s Teams for the Master’s Men ministry.