Identify Your Dreams And Goals.
On this page, you will:
- be able to differentiate between dreams and goals.
- learn the features of a good goal.
Dreams and Goals.
The aim of budgeting is to help you achieve your dreams. Without dreams and goals, then your budget will have no direction and purpose.
Dreams are the final destinations, or aims that you want to have or achieve. Goals are the checkpoints between now and your dreams.
Example: Goal setting.
My dream is to be free of debt.
So my goals will be:
- Pay off my credit card debt.
- Pay off my personal loan.
- Pay off my bank overdraft.
- Pay off my mortgage.
Looking at the example above, for every goal that I have achieved, I’ll be one step closer to my dream.
Features of a good goal.
Financial goals are objectives or targets that can be measured with money. A good financial goal contains three features. They are descriptive, measurable and is time specific.
Example: Goal setting.
My goal is to “Save $10,000 as down payment for a house within 2 years.”
Descriptive: Save down payment for a house.
Measurable: $10,000.
Time specific: 2 years.
When the three features are not clearly defined, then goal becomes weak and sometimes does not even make sense. Therefore you need to define your goals clearly. This is important so you are clear in your mind what are the objectives that you want to achieve.
Next: Goal Setting.
Previous: Steps In Budgeting.