We set tonnes of goals each year. Run a marathon... learn a new language... but don't forget to set financial goals, too!
We set tonnes of goals each year. Run a marathon… Learn a new language… Organise our pantries… Only buy vintage… The list goes on. And on.
But often, we forget to set financial goals. These are plans for what we want to do with our money. It could be:
Whatever the goal is, if it involves how you plan to save and spend your money… it’s a financial goal.
Having a financial goal is one thing. Executing it? That’s another. And that involves some actual planning… and some perseverance.
Financial goals tend to come with different time horizons. For example, saving $1,000 might be a short-term goal… but saving a house deposit? That’s gonna be a long one.
So, as you’re writing down your financial goals, you’ll want to split them into:
Often, setting a big saving goal like building up a house deposit can seem a little daunting. But, breaking a big goal up into smaller, short-term goals, can help motivate you to get there.
Medium-term financial goals examples can include anything from saving a house deposit to buying a first home, or even establishing routine contributions to your super fund.
Two of the biggest long-term goals are having enough cash in your super to retire or planning for a family.
Once you have some loose financial goals and timeframes around them, you’ll want to turn them into SMART financial goals. That’s:
The more niche your goal, the more likely you are to achieve it. An example of a SMART goal would be:
I am going to save $2,000 (specific)… and track my progress in my savings account (measureable)... I’ll do so by transferring $100 of my pay cheque every fortnight into my savings account (achievable)... it fits into my current budget, so I know I can do it (realistic)...and by X date I will have achieved this goal (timely).
Once you have a plan around your financial goal, you’ll want to incorporate it into your budget. If you’re doing the 50/30/20 budget for example, that means making sure you’re not overspending on entertainment or necessities to ensure you have enough left over to save.
If that necessities bucket is overflowing (TY inflation), you may want to take another look at your financial goals. Can you break them down into even smaller goals? Can you stretch the time horizon out?
Remember: financial goals aren’t set and forget. It’s important to continually check-in with your goals to make sure you and your budget are on track.
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