What does it mean to have financial goals that are realistic?

Having financial goals that are realistic means setting targets that take into account an individual's current financial situation, resources, and constraints. This involves creating objectives that are attainable and practical rather than overly ambitious or disconnected from one's reality. When goals are based on what is realistically achievable, they are more likely to motivate individuals to take action and remain committed.

For example, a realistic financial goal might include saving a specific amount of money within a certain timeframe based on current income and expenses. This kind of goal helps individuals manage their expectations and allows them to devise actionable plans that fit their lifestyle.

In contrast, goals that require significant lifestyle changes may not be practical for everyone to achieve; they can lead to frustration and motivation loss. Aspirational goals can be valuable for long-term vision, but if they are not aligned with current circumstances, they may not foster the necessary steps to improve one’s financial situation. Lastly, focusing solely on investments and savings can overlook other important aspects of financial health, such as budgeting and debt management, which are essential for a comprehensive financial strategy.