Setting Financial Goals

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Happy new year readers and welcome back. I must say it has been a while, but either way welcome back. Because its the new year and most of us are setting goals, I thought let me talk about setting financial goals. This is a Financial Wellness Blog and to get more insights on what Financial Wellness is click here

I will be sharing tips on how to set your financial goals. Before we dig deeper on to setting goals, let us first explore what is a goal.

What Is A Goal ?

‘A goal is an idea of the future or desired result that a person envisions, plan and commit to achieve”~ Wikipedia. I love this definition because it highlights the most basics steps one must follow to achieve their desired results; envisioning, planning and committing.

It is said that when we set goals they must be SMART.

  • Specific- Be specific! What do you want? and why do you want it?
  • Measurable- How much of it do you want. For example if you want money, how much money do you want because R1 is money too. If you want a car how much do you need. You want to be able to measure the progress so you will know when you have reached the finish line
  • Attainable- Is it within reach, can you achieve it. This is a mind game, if your mind says yes no one can tell you otherwise.
  • Relevant- Is your goal relevant to you, is it making sense to you and is it aligned with the long term version of you?
  • Time Based- Give yourself a deadline. This is a sign of commitment towards achieving your goals e.g. “I would love to have an emergency account that has X amount of by the 31st of December 2022”.

Why is Setting Financial Goals Important?

Setting financial goals helps you to focus. The nature of money is to come and go. You will have an inflow of money and an outflow of it. When you have no proper plan of its outflow it will flow to the areas that are not very significant to you and that are not bringing you closer to your dreams. Therefore setting financial goals will help you direct your money to the areas that are aligned with your dreams and values.

How To Set Financial Goals?

1.Write Them Down

Write them down, there is a belief and some studies that say people who write their goals have a higher chances of achieving their goals than those who don’t. Neuropsychologists say when writing your goals down you are encoding them into your brains.

2. Be Specific

As per the smart concept, it is very important to be specific about the goals you want to achieve. It can be anything, from paying off debt, having emergency funds, or buying something that you want. Just make sure you are not general about them. Saying “I want money on my savings account” is totally different from “I want R10 000 by the end of the year on my savings account.

3.Answer The Question Why

As you are writing them down answer the question “Why do you want to achieve this goal?”. This will help you ensure that the goal is for you and you only. We are human beings and we can be easily distracted. You see a person buying a second car and all of a sudden your goal becomes a second car, I call this peer pressure wound in my book Healing the Wounds Of Debt. Asking the question why will bring you clarity. It will show you if the goal is driven by you aligning with your values or if peer pressure is playing its role

4.Believe In Your Goals.

One of the fastest way you can quickly sabotage yourself in setting financial goals is not believing that you can achieve them . I always say we never sabotage ourselves consciously. You could vocally say you want to earn a Million rand per annum but subconsciously believe that the amount can only be earned by a certain caliber of people who have certain qualifications or of certain race. With this belief you are most likely to sabotage every action you take towards achieving this goal because a part of you does not feel worthy of the amount. If by any chance you do not meet the “believed criteria” you might find yourself constantly sabotaging yourself.

One of the exercise I do when setting a goal or coaching a someone for goal setting is I ask them to close their eyes, take few deep breaths, open your eyes and look at the goal again. Do you believe you can achieve it or are you sensing a bit of unease, doubt or fear. If there is a bit of resistance, do not ignore, clear those and understand what is the root course.

5.Create Action Steps

What needs to happen for you to achieve this goal. A simple example, you can not be saying you want to save a certain amount of money in a savings account but you have not opened a savings account. You can not be saying you want to settle your debts earlier without a payment plan that will ensure that you meet your dead line. Create actionable steps that will ensure that you arrive at your desired outcome.

Thank you for taking time to reading this post, I hope it will help you when you are setting your financial goals. After you have set your financial goals remember to track the progress. You do not want your goals to die as the year goes off.

If by any chance you need assistance with your goals making sure that you keep them alive, I have a 6 months program that is specifically designed to help you achieve your goals that are aligned with your values. You can also book a once off coaching session to set your financial goals.

For more enquiries you can contact me at +27 74 931 1000

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