Target Stats

In “Forward Looking” I talked about goal setting and plans and how Numbers help to both describe the goal and more importantly measure progress towards achieving it. That’s where “target stats” come in. They make up the mile posts on the road to reaching goals. It’s best if they’re easily definable and trackable. They’re super dynamic tools if you make them an integral part of the goal-plan process.

Example:

Let’s say your goal is to get a new PC, you estimate it will cost $1,200 and you want to buy it for cash in 12 months. You plan to save a $100 per month. The $100 per month is the target stat which meets the test of being both easy to understand and easy to track. Four months into the plan you should have $400 put away, it just that simple.

What happens, however, if the $400 not there? That’s where the real power of the target stats as a dynamic tool kicks in. You’ll first want to know what happened. Did you forget to put away the money, did you spend it on something else or maybe you never earned what you thought you would. Whatever it is you need to identify a reason. Once you know the reason the next step is to revisit the goal.

Is the goal still important to you? If yes, revise the plan, if not scrap the goal.

I hope you’ll see the above is a process, an iteration, a series of steps designed to help you refine and reach your goals. Obviously our lives and businesses are more complicated than one goal at a time. Oft times we’re not even sure what our goals should be. That will be the subject of other posts.

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About jaysanderscpa

Jay Sanders, CPA/PFS, CFP® "There's lots and lots of Numbers in business and your personal life but only some are relevant. The key is to know which one's matter, worry about them and forget the rest."
This entry was posted in Financial Literacy Basics, General #s, Personal #s, Planning Tools, Small Biz #s and tagged , , , , , , . Bookmark the permalink.

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