Goal Setting: Dreams vs. Goals, Types and Characteristics

• Goal setting involves determining what you want to achieve and devising a plan to realize it.
• A goal is an objective or want that you plan to fulfill—a specific outcome that you intend to work toward.
• The basics of goal setting include choosing, writing down, breaking down, visualizing, reviewing, and regularly updating your goal.

Dreams vs. Goals

• Dreams involve hope, while goals involve planning and action.
• Dreams happen someday; goals happen at particular times.

Types of Goals

• Goals can be categorized by time frame and purpose.
• Short-term goals take less than a year to achieve.
• Long-term goals take a year or more.
• Goals can also be performance-based, relating to how well you do something, or learning-based, relating to mastering a new skill.
• Performance goals involve evaluation and achievement.
• Learning goals involve acquiring new skills or knowledge.

Characteristics of Goals

• Dynamic goals can change over time.
• The scale, or size, of goals can vary.
• Small-scale goals are short-term.
• Large-scale goals are long-term.
• SMART goals are those that clearly define what you want to achieve and ensure you know when you've achieved it.
• Effective goals take priority over other activities.

SMART Acronym

• Specific goals include the necessary details to avoid confusion and clearly define what you want to achieve.
• Measurable goals are quantifiable and tracked in terms of metrics like time, distance, or money.
• Attainable goals must be realistic and achievable.
• Results-oriented goals focus on accomplishing something tangible and provide clear evidence of success.
• Time-bound goals have a specific deadline, indicating when the work begins and ends.

Benefits of Setting Goals

• Provides a clear picture of where you are headed.
• It keeps one focused.
• It provides specifics for gathering resources.
• Provides a way to measure progress.

Goal-Setting Process

Choosing a Goal

• Involves selecting meaningful and appropriate goals that are SMART, effective, and positive.

Writing the Goal Down

• Involves putting it on paper or digitally.
• This clarifies goals in your mind and use action verbs to make them clear and motivating.

Breaking the Goal Down

• Involves pinpointing the main goal and splitting it into smaller, short-term goals.

Visualizing the Goal

• Involves imagining what it would be like at the destination/after a goal's success

Reviewing/Updating the Goal

• Involves regularly reviewing progress after creating a plan, making adjustments as needed.

Additional considerations:

• When prioritizing goals, avoid ranking every goal numerically, or ranking everything as #1.
• Realistically, you can only focus on 2 or 3 goals at a time.

Financial goals, and planning

• Financial planning helps in being conscious of spending, planning big purchases, and setting aside money for the future or investing it.
• Financial planning creates a long-term focus and financial security.

Opportunity Costs

• Opportunity cost describes the benefit lost when choosing one option over another.

Financial Planning

• Consists of examining values, setting goals, earning income, planning budgets, and choosing to live within your means.
• Critical for building financial security and making informed decisions.
• Makes achieving financial goals more achievable.

Benefits of financial planning:

• Meeting needs and wants
• Influencing the future
• Recognizing the importance of income
• Preparing for emergencies
• Recognizing the importance of investing.

Common Obstacles to financial planning:

• Impulsive Spending occurs due to advertising and peer pressure, especially when ready cash is available.
• Easy access to credit cards leads to overspending, and debt accumulation due to paying interest on balances.

Setting SMART Financial Goals:

• Specific: The amount/goal must be clear.
• Measurable: Measurable goals can be counted or assessed in a way that shows clear progress.
• Attainable: Attainable goals are ones that are realistic and within reach.
• Results-oriented: Goals that are results-oriented focus on getting something done
• Time-bounded: A time-bounded goal has a time limit with a target date that helps you focus on what needs to be done when, and then gives you milestones by which to gauge your progress.

Financial Goal Process:

• Financial goals should be based on needs and wants.
• Break down each goal into smaller parts.
• Identify the time horizon for each financial goal.
• Short-term financial goals are those with a time horizon of less than three months.
• Intermediate financial goals are from three months to three years.
• Long-term financial goals are over three years.
• Prioritize your goals.
• Make plans to support your goals.