FINANCIAL GOAL SETTING

Setting goals is one of the most important life activities to help one take control of one’s future. Goals help set a direction in life. Clearly outlined goals help a person to be motivated and stay focused. They are an important determinant of resource allocation. To clearly define one’s goals, a person should understand the current reality (where they are) and be able to picture the future they want to achieve (where they want to be).

What is a goal?

A goal is a result that one is planning to achieve

Importance of goals

• Keeps the person focused and motivated on his/her purpose
• Keeps the person accountable
• Creates a roadmap for success
• Helps the person to see where they are going, measure the change that they want to see in their lives, and check whether they are on the right track to success

Examples of family goals

• Send to and pay for their children’s school
• Build a house
• Buy furniture e.g. table, chairs, nice bed
• Have adequate food
• Have adequate clothing

Categories of goals

Goals are categorized into 3 categories

Short term goals: these are goals that can be accomplished within the shortest period of time usually within a 12-month period e.g. buying fertilizer. However, it is sometimes hard to define goals in time periods because the definition of whether a goal is short term or medium term would be affected by the type and time factor of the overall goal.

Medium term goals: these are goals that can be accomplished between short term goals and long-term goals. They help to keep the person motivated towards the achievement of the overall goal.

Long-term goals: these goals may take a long time to accomplish e.g. building a house

How to achieve goals

1. First, understand what resources are needed to achieve the goal
2. Check available resources and make count of the deficit
3. Make a plan of how much to save, and for how long to cover up the deficit [one can decide whether to save or borrow to cover the deficit

Some of the obstacles to goal achievement

• Sickness or death of a family member
• Poor crop performance
• Low prices for farm produce [which may come in because over-supply. For example, the 2016-2017 growing season saw the prices for farm produce go lower because of over-production. Some farmers did not find markets for their produce while others sold theirs at below the production cost.)
• Divorce, theft, accidents