Financial Goals: How To Tell If Yours Are Truly Realistic

Everyone sets goals.  But how many are actually within reach?  Or better yet, how can we take steps to get closer to having those seemingly unattainable dreams become strategically reachable goals?  In this Forbes article, LearnVest contributer Colleen Oakley really examines the topic of financial goal setting.  Here’s what she has to say.

We all have goals—but there are good money ones, and then there are the other kind.

Specifically, the ones that involve a lot of fantasizing about what life will be like when …

In fact, research has shown that setting overly ambitious goals is a surefire path to not doing what you set out to.

Why? In short, we tend to get so busy imagining our fantastic future, we feel like it’s already happened and may forget to actually take the steps that will help get us there.

So how do you know if your current goals are realistic—or too pie-in-the-sky? We asked three people to share what they’re currently working toward, and enlisted David Blaylock, CFP® with LearnVest Planning Services, to help them figure out what steps they should take next.

See what you can learn by following in their footsteps.

I Want to Save for My Small Business

Andrew Orr, 32, army helicopter pilot, Indianapolis

His Goal: “I want to start a small business—either a restaurant or small storefront for handmade retail goods—this summer, but I don’t know if I have what it takes financially. I expect I’ll need at least $60,000 to get it up and running.”

Where He Is Now: “My current salary is $79,000, but it will drop to $35,000 in July, when I join the Indiana National Guard. The only debt I have is $78,000 left on my mortgage. I have about $40,000 in savings that I’ve been setting aside for entrepreneurial projects and about $50,000 in my retirement fund. I don’t have an emergency fund. In fact, I couldn’t leave my job if I wanted to—I’m committed to the military for another few years. 

RELATED: What Is Business Credit, and How Do You Build It?

“I’ve read, planned and talked to friends with their own businesses to get an idea of what it would require. I know I can utilize my savings to try and get a business off the ground, and I also have an opportunity for partnership and equal investment, if I want to share. Also, I call in some favors—my sister is an interior designer, my dad is a carpenter and I have close friends in the service industry. But I’ve read that a major cause of failure is a business being underfunded from the get-go, so I’m a little wary.”

Are Your Financial Goals Realistic?What the CFP® Says: “The main thing whenever you’re considering funding a business is to make sure your expenses and debt are all taken care of. In Andrew’s case, he just has the mortgage, which is great. He doesn’t need to pay that off before starting his business, but he should make sure he has set aside emergency savings—at least six months of income—and not allow that to be invested into the business. So, if he wants to take $20,000 of his savings and use that for the emergency fund, and then use the rest to fund his business, I think that would be fine.

“As far as getting a partner, it depends on the circumstance, but it’s usually not a good idea to take on a partner just because you need or want the extra cash. Make sure there are other things they bring to you and to the business aside from the money. Taking on a partner just for funding seldom works out well.

RELATED: The Secret to Being in Business With Friends


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