To realise your dreams, set financial goals & follow through.
Why do we make New Year’s resolutions? Because when we look at our lives, whatever stage we’re at, we all see things we want to, and can, improve on.
For many of us, one of those things is our finances. But talking about our money with others is usually off limits. We just don’t do it.
So, we’re left with niggly questions hiding in the back of our minds - Where do I want to be in 10 years? When will I be able to slow down and start enjoying my money? What kind of lifestyle will my savings provide? Who should I talk to for guidance?
These are difficult and deeply personal questions. But setting goals and talking about your finances can help you to answer them. Talking with an expert financial adviser can help even more by giving you support and guidance as you map out your financial journey, and the peace of mind that comes from knowing your investments are getting the attention they deserve.
The value of goal setting
Setting goals guides your focus and sustains your momentum by giving you something to work towards. Goals give oxygen to your dreams and are the first step in achieving something special.
Take some time to imagine how your life might look when work and family commitments wind down. What sort of lifestyle do you want - and how much will that lifestyle cost?
For example, Massey University’s Annual Retirement Expenditure Guidelines estimates a two-person metro household will need $1,578 per week to live a ‘choices’ lifestyle; for a provincial household it drops to $1,263 It’s important not to rely on others when setting your financial goals. Make sure that what you want is achievable for you, by you, and is not reliant on anyone else’s contribution.
Don’t forget that a dream written down with a date becomes a goal. A goal broken down into steps becomes a plan – and a plan backed by action becomes reality!
How to do it
Sometimes the hardest part of goal setting is simply starting. Of course, the sooner you begin, the sooner you’ll be on track to achieving your financial objectives. So, set aside some time, boil the jug, and sit down in front of a blank sheet of paper (or a blank Google doc) and get going.
Imagine: Begin with a good old-fashioned brain-dump, focusing on your ‘what’ and your ‘why’. What do you want to achieve in the next 5, 10 or 20 years? Why is that important to you? Jot down each and every thought – there are no bad ideas.
Organise: A sheet of paper with chaotic thoughts haphazardly written on it can feel a bit daunting. So, now it’s time to organise. Group similar ideas and goals together and try to break any massive goals down into smaller, less intimidating ‘mini-goals’.
Plan: Next, shift your attention to the tangible actions you can take to bring these goals to life. Give yourself weekly, monthly and annual tasks; remember to include completion dates to keep yourself accountable.
Track: Set yourself some measurable criteria so you can monitor progress. Put your goals list somewhere you a) won’t lose it, and b) can refer to it. Cross off tasks and targets as you accomplish them to demonstrate things are moving in the right direction.
Enjoy: Achieving your financial goals can seem like hard work – so it’s important to take the time to celebrate the little victories along the way. When you reach a milestone, make sure you treat yourself to a dinner out, a trip to the shops, or at the very least, a hearty pat on the back!
SMART goals
Another way to set goals is to take up the concept of SMART goals. It’s not a new idea but is still relevant when it comes to your investment strategy. If you base your goal setting sessions around these five criteria, you’ll end up with a clear plan and the best chance of success:
- Specific: Clarity is critical. Succinct, well-defined goals keep you focused and help you make the right decisions along the way.
- Measurable: You need a target – setting measurable steps means you’ll be able to track your success and see if your investment strategy is working.
- Achievable: There’s a fine line between ‘dreaming big’ and being unrealistic. By all means shoot for the stars – but remember, an impossible goal is destined to fail.
- Relevant: If you want your goals to inspire action, they need to mean something to you. So, while you’re thinking about what you want to achieve, also consider why you want to achieve it.
- Time-bound: You want to achieve your goals in the foreseeable future, right? Give yourself a start date (when you commit to action) and an end date (a target to keep you motivated and driven).
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Disclaimer: This article is intended to provide you with general information only. It does not take into account your objectives, financial situation or needs. Before investing you may wish to seek financial advice. For more information about Milford’s financial advice services visit milfordasset.com/getting-advice. Financial Advice Disclosure Statements for all Milford Financial Advisers are available on request free of charge.
