Set Financial Goals
- Ron Blue Founder of Ronald Blue & Co.
- 2002 20 Apr
In my business, we probably spend more time helping people determine what they want to do than anything else. You would think that a person who had great resources would have no problem setting goals. But it has been my experience that the more resources you have, the more difficult goal-setting usually becomes.
I once spent a day with a man who had a $32 million business. We spent five hours talking, yet he could not tell me what he really wanted to do with his money. He didn't know where he was going. He had no goals.
Not knowing where you are headed financially can lead you to serious problems. If you don't know where you are going, you'll never know when you have arrived, nor will you know how to get there. One benefit of goals is that they can help you have a better self-image, because when you reach them you have a sense of achievement.
How do you set goals? You need to ask yourself, "Where am I going in the short term and the long term? What do I want to accomplish in the short term regarding lifestyle, giving, taxes, saving, and debt payoff? Long-term, what are my goals regarding financial independence, college education for my children, debt payoff, giving, lifestyle, and owning my own business?" ...
Suppose a husband says, "Our goal is to build a new home with two bedrooms and a study," while his wife says, "Oh no, it's going to have five bedrooms and a sewing room." They agree that they want to build a new home, but the specifics on how to accomplish the goal vary widely. This is a sure sign of incongruous goals.
Unfortunately, few husbands and wives communicate specifically about their goals. If you start a marriage perfectly united with the attitude, "Whatever she wants she can have," or "Whatever he wants he can have," that's honorable. But how long can that attitude last? Few people keep it through the honeymoon!
Suppose a husband and wife started out together at age twenty-two with their goals just one degree off from each other. Fifty years down the road, how far has that one degree led them apart? The gap between their goals looks like a huge valley in their relationship.
One of the most difficult things I the world is getting a husband and wife to agree on major goals. I believe when they start out they should have perfect agreement - especially about finances. The only way to be sure there is agreement is to commit goals to paper. Then both partners clearly understand them. Ask yourself, "What is it that God would have us accomplish together as a couple?" Commit your goals to paper to avoid incongruity.
An unquantified goal is fuzzy. At best it is a purpose statement. Suppose somebody asks you, "Would you like to take a ride Sunday afternoon?" and you answer, "Sure." Before long you realize he has in mind driving to the next major city, but you assumed you would stay in town. You had agreed to the same thing, but you did not specifically state where you would go.
A financial goal is not truly a goal until you can write it down in terms of dollar amount and time period. If you cannot state it that way, it is at best a broad statement of intention. If a goal is not quantified, you will never know whether you have accomplished it.
Fear instead of faith
The fourth mistake involves goals established on the basis of fear rather than faith. So often we set our goals by listening to others rather than to God. If God has entrusted certain resources to you, do you think He is concerned about how they are allocated? Of course He is. That is why He has given us the Bible and the Holy Spirit, as well as wise counsel from mature believers, to guide us.
A faith goal comes from God. I can literally say, "This is what God would have me do with His resources." Knowing that can remove all fear.
Excerpted from Avoiding Common Financial Mistakes, copyright 1990 by Ronald Blue. Used by permission of NavPress, Colorado Springs, Co., www.navpress.com. All rights reserved. For copies of the book, call 1-800-366-7788.
Ron Blue has written numerous books on managing money.
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