Setting goals is an important part of life in general and financial planning in particular. Isn’t it our aim in life to be better than we were last year? Financially, spiritually and physically?
Goal management expert, Paul J. Meyer in “Attitude is Everything,” sug­gests using the acronym SMART.  Goals need to be: Specific, Measur­able, Action-Oriented, Realistic and Tangible.
This applies to life and your financial goals.
Specific:

• Determine your specific financial goals. What are you saving for?
• Emergency fund
• Buy or build a new home
• Start your own business
• Children’s college education
• Plan a large purchase
• Travel
• Retirement
• Increase your net worth

Measurable

Determine your time horizon. ‘When you will need the money for each of your goals is a critical factor in determining how to invest. Some of your goals will be short term, some intermediate, and some long term.

Action

After you’ve set your goals and measured how long you have to reach them, create steps to obtain the goals. Without some planning, the odds of achieving your goals drop significantly. Generally, you should leave the construction of an investment plan to a professional financial advi­sor, especially if you are investing a significant percentage of your total wealth, or if you’re relying solely on the “success of your investments to meet your future financial goals. The plan will help you determine:

1. How much will you need to invest, in addition to what you may have already saved
2. Which investments you should invest in for your time horizon and risk tolerance

Realistic

Be realistic when deciding how much money to invest and deciding how best to allocate those investment dollars. Start by determining how much you’ll need to set aside monthly or annually, in addition to any lump sum of cash you may already have, to meet each goal. Be realistic about how much you can invest so you can cover all your financial obligations and keep your plan on track. The next part of the planning process is how best to allocate your money across investments such as stocks, bonds and cash alternatives. Asset allocation is the investment strategy that attempts to balance risk versus reward by adjusting the percentage of each investment  in the plan according to your goals, the time frame to reach those goals and your risk tolerance. Once your fi­nancial advisor has all these parts in place, you will have a realistic plan to meet your financial goals.