Having clear financial goals is the key to having a bright future. Whether you’re saving for a house, a holiday or getting ready for retirement, here’s our expert tips for setting, tracking and keeping your goals.
We all have different expectations of our money. Some people dream of retiring at 50 or yearn to get out of debt. Others might simply want enough financial security to deposit a couple of hundred dollars each month into an emergency fund.
One of the hallmarks of successful people and high achievers is that they start by setting clearly defined goals and then plan the smaller steps needed to achieve those goals. Clearly defining your goals allows you to create a realistic plan to achieve them.
Wondering how to set goals and stick to them? Here’s six tips for getting started:
1. Define what drives you
Often when we set goals, they lack one important aspect – passion. The more passionate we are about something, the more likely we are to achieve that goal. Think about what drives and motivates you to succeed – it could be a common motivation, like wanting to retire early, or something more personal, like wanting to help a family member get out of debt.
2. Be specific
Setting financial goals isn’t as simple as just saying you want to have an emergency fund. One of the biggest mistakes that people make when they’re setting goals is that they’re unclear. When you talk to your financial planner, be specific: How much do you want in that emergency fund? When do you want to have reached that emergency fund limit? The more detailed your goals are, the clearer the path to achieving those goals.
3. Formalise your goals
There never seems to be enough hours in a day for all the things we have to do, let alone to keep track of our goals. Writing your goals down or verbalising them to your financial planner or a friend is a good way to honour your commitment to yourself.
4. Track your goals
Measuring progress is a great way to stick to a plan or goal. For many of us, seeing the progress we’ve made can be addictive and motivates us more in achieving our financial goals. Say you wanted to get out of debt, what would motivate you more than watching your debt balance reduce each month?
5. Surround yourself with visual reminders
Creating frequent reminders is another way to stay on track of your goals. Rename your savings account or stick a picture of your financial goal on your refrigerator or mirror. When our subconscious mind is aware of how important our goals are and is constantly reminded of this fact, it helps us see opportunities that will get us closer to achieving these goals.
6. Stay flexible
Your life and circumstances can change in the blink of an eye. A good financial plan should be dynamic and be able to flex and change as your life changes and grows. Make regular appointments with your financial planner so that you can reassess your goals. Are you still on track? Has anything changed? Do you need to adjust your goal to make it more achievable? If you find that a goal you set is no longer achievable, adjust the goalposts until it is.