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Setting Goals and Developing a Plan

Thursday, March 30, 2006
I think people often overlook the importance of the correlation between a plan and goals in personal finance. Often times I talk to people who have a goal that is set really high, however their plan looks like they are just trying to remain afloat. They often need either an adjustment of their plan or change their goal a bit. While this may seem very superficial or abstract, there are many positives that arise from having a good plan in place.

One of the biggest things that will happen with a detailed financial plan is that you will be able to make decisions based on whether they fit into your plan or not. If you keep these goals in mind whenever you are making a decision on what to do, it is very much more likely that you will achieve that goal.

The most realistic way to go about creating a plan-goal combination is to create a few goals for your different time periods. Then with that in mind, start thinking about how you will do this. Put it on paper. Then look at the plan and re-think whether they will get you to the goal. If not, either re-think the goal or the plan to achieve it. Do that until you are satisfied that you have a very strong correlation.

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