10 Feb New Year. New You. How to set (and reach) your financial goals
With a New Year comes a list of new goals. No matter what stage of life you find yourself, goal setting is essential for personal growth and success. Financial goal setting will put you in charge of your money and ultimately your life.
Why set goals?
If you don’t know where you’re heading, you’ll never get there. Many of you will be familiar with the story “Alice In Wonderland” and the exchange between Alice and the Cheshire Cat:
“Would you tell me please, which way I ought to go from here?”
“That depends a great deal on where you want to go” said the Cat.
“I don’t much care where ___” said Alice.
“Then it doesn’t matter which way you go,” said the Cat
“__ so long as I get somewhere,” Alice added as an explanation.
“Oh, you’re sure to do that,” said the Cat, “if only you walk long enough.”
Alice doesn’t have a goal. With no idea where she wants to go, Alice continues to wonder aimlessly throughout the story.
As the Cheshire Cat points out, she’ll arrive somewhere eventually, but who’s to say she will like where she ends up?
Understanding the importance of goal setting and knowing how to set goals for yourself is crucial to accomplishing great things in your life. But how do you know if you are setting quality goals?
Goals should be S.M.A.R.T
Specifically define: What do I want to accomplish? Who is involved? Where will it be done? Why am I doing this? When will I achieve my goal?
A measurable goal will allow you to track how you are progressing towards achieving your objective.
Your goal should be challenging but not too implausible. Setting an unachievable goal will only set you up to fail.
Your goal should matter and align with your short and long term plans. A florist’s goal to bake 31 chocolate cupcakes by 1:00pm may be specific, measurable, attainable and time-bound but lacks relevance.
Commit to a deadline. Linking a goal to a time-frame will create a sense of urgency and keep you focused on achieving what you set out to.
Planning for the future
In our experience, we find few that have sat down and properly discussed their financial goals.
For many, no matter how much we love our career, very few set a goal to work forever; a key goal is to retire from working. But simply depending on the Government to support us through retirement is becoming increasingly unrealistic. More than ever, we’re required to have the financial resources to fund retirement for ourselves.
When thinking about retirement, trips to Europe or buying a caravan are all common thoughts. But few discuss when they would like to retire, the type of lifestyle they would like to have, and most importantly, whether they are on track for that retirement. Shockingly, 7 out of 10 Australians are not on track for the sort of retirement they would like to have.
A report released by the Organisation for Economic Co-operation and Development (OECD) has confirmed that Australian pensioners don’t have enough money to live off, with a whopping 36 per cent of pensioners living below the poverty line.
What you can do
As a minimum, sit down with a professional to find out the sort of retirement you’re headed for. If you are in the majority of Australians who aren’t on track, take the New Year opportunity to set your goals and make changes while you are still working.
Most people are unaware of the strategic options available to benefit both their present, and future financial situation.