Final answer:
Developing financial goals involves identifying feelings about money, developing short-term and long-term goals, and differentiating needs from wants, not preparing a list of current asset and debt balances, which is part of assessing one's current financial state.
Step-by-step explanation:
When developing financial goals, there are several components involved to ensure a well-rounded approach to personal finance management.
The process does not involve preparing a list of current asset and debt balances, as this is more relevant to the evaluation of one's current financial state rather than goal setting. Let's consider the correct components:
- Identifying feelings about money: Understanding your emotional relationship with money can influence your financial decisions and goals.
- Developing short-term and long-term goals: Having clear objectives for the near future as well as long-term aspirations is fundamental for financial planning.
- Differentiating needs from wants: Recognizing the difference between what is necessary and what is non-essential can aid in prioritizing spending and saving.
On the contrary, preparing a list of current asset and debt balances is a snapshot of one's current financial situation, which, while important, does not constitute developing goals.
Setting goals involves looking forward and planning how to achieve financial targets, which requires evaluating various aspects such as budgeting, saving, investing, and effectively managing expenses.