It can feel like you’ve been working toward your financial goals forever, and staying on track is difficult under the best of economic conditions, let alone when it hits the skids. So if you’re pretty sure you’ve made progress but can’t quite tell if you’ve hit your targets, how can you know with certainty that you’ve been successful?
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Well, there are three key signs that you’ve finally reached your financial goals. Let’s explore below.
You Followed a Clear Financial Plan and/or Investment Strategy
You may want to save $2,000 for your vacation next summer, but how will you accomplish that? You have good intentions, so you’ll likely stash some cash aside. This is a different stash outside of the money you are using to save for retirement or build an emergency fund.
However, chances are you won’t hit your target unless you have a savings plan. A goal without a strategy to accomplish it is just a wish, whether that’s paying off debt or saving for a down payment on a house.
If you create and follow a clear plan, you increase your odds of success significantly. For example, your plan could include the following steps:
- Break your shorter-term or longer-term goal amount into manageable chunks by calculating how much you need to save monthly.
- Set up direct deposit or automatic transfers to your savings account for that amount.
- Boost your savings account balance with a tax refund or other windfall.
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The Numbers Speak for Themselves
Managing your money involves doing the math, and the numbers you crunch don’t lie. By looking at the mathematical proof, you can undeniably confirm that you’ve achieved your financial goal.
Did you pay off your credit card debt with high interest rates? Have you fleshed out your plan for retirement savings? Can you cover your living expenses and still have enough left over each month to invest elsewhere?
If you said yes to these or any other goals you’ve put on your docket, then you are a financial goal-achieving machine.
Your Accomplishments Have Compound Interest
While dealing with financial matters entails looking at the numbers, real emotions are involved, too. You should feel proud to have consistently worked toward your money-related goals.
But at what point should you feel accomplished? Sometimes it helps to work backwards and see what types of goals you are trying to achieve by the results you already have.
Examples of short-term goals can include saving up $2,000 for your vacation next year or paying off your $800 credit card balance in the next six months. Long-term financial goals can consist of amassing $100,000 for a down payment on a house or investing $1 million for retirement.
Final Take To GO: Ready, Set, Goal!
The bottom line is that not all goal-setting methods are equal. Ask yourself: What are your hopes and aspirations? How can you get there? What can you do today to help you get closer to achieving them?
Try making these goals as specific as possible and time-oriented to ensure efficiency. Often, the types of financial goals that work best tend to stick to the SMART Goal framework. This means setting Specific, Measurable, Achievable, Relevant and Time-Bound goals.
By setting SMART goals this way, you can accumulate enough assets in everything from retirement accounts to a diversified portfolio. Good luck!
Laura Gariepy contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: 3 Key Signs You’ve Finally Reached Your Financial Goals
