Strategic planning will ensure you achieve your financial goals. It is recommended when deciding on goals to start with the end in mind and work backwards. Some people's financial goals may be unhealthy such as hoarders or people who are big spenders so reviewing goals with a specialist can help ensure it is in your best interest. Starting with the end in mind includes thinking about who you will be with, what purpose will it achieve, the emotional outcome and implications, and what stage in life you will be in such as retirement. You may then decide to share your goals with someone who has a healthy financial mindset to consider another perspective. Lastly when thinking about financial goals ensure it is realistic. A financial cash flow projection by starting with the present and looking forward into your finances will make sure you can achieve your goals and it is realistic. A financial projection can also help you identify if you need extra income. For example, include inflation each year to make sure it is in real terms. Thinking about your financial goals and doing a financial projection will help you take control of your finances and make better financial decisions.
Use SMART goals for success. SMART goals will help you be more specific and think in realistic terms. SMART stands for Specific, Measurable, Actionable, Realistic, and Time bound. For example, I want to save $80,000 for a house to purchase in 2 years time. I would then ensure the goal is realistic and detailed in my financial projection and researched properties and the loan requirements. Tell people close to you about your goals so you are held accountable and then plan how you will save for your goal to action it. If you have more than one goal, then priorities. Some goals can wait and others need to be actioned immediately. For example, a goal to save for a boat may have to wait by practicing delayed gratification while paying off a mortgage that will need to be actioned immediately. You may need to work extra to pay for the boat but your financial plan will help guide your decision making. Lastly monitor your progress by placing review dates in your diary to ensure you stick to your goals. Life has a way of throwing challenges and surprises which may mean you will need to adjust your financial plans and time to reach your goals. Enjoy goal setting to improve your financial wellbeing.
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AuthorArticles about mental health, money and behavior Archives
February 2024
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