Financial independence comes with goal-setting: How to get started - Women's Agenda

Financial independence comes with goal-setting: How to get started

Many Australians find themselves working until retirement age or longer, and retiring on much less than they hoped. Unfortunately, this situation is often far worse for women who typically retire with less savings than men.

But this doesn’t have to be you. Let me explain…

Do you ever complain that your partner doesn’t understand what you want? The reality is that most people don’t truly understand what they want themselves, so what hope do their partners have? I have found that the individuals who are unsure about their goals typically exercise short-term thinking and forgo planning for their future.

Self-exploration requires effort, not only to work out what you want, but also where you want to be and when you want to be there. This brings to mind an old saying, “That I will do today what others won’t so I can play tomorrow where others can’t”. Or, in other words, we need to practice delayed gratification: go without something today so we can have more tomorrow.

Achieving this in today’s ‘I want it now’ society is difficult. We’re continually bombarded with fancy marketing enticing us to consume more products and services. But the effort you put into planning for the future is worth far more to you than satisfying a need today.

So now that I have your attention would you like to know how you do it?

The Secret to Your Success

High on the list of items that successful people are in the habit of doing is setting financial goals. This not only allows them the freedom to focus on what they want, but more importantly, in the process of setting these goals, they really come to understand why they want them. By understanding the ‘why’ there is a clear driver to achieve the goals set.

Let’s face it, if you had to save $20,000 in the next 12 months, or face the prospect of losing your house, I am sure like most people you would find a way to do it.

It’s important to set goals for all areas of your life, but first let’s start by working on your financial goals.

Remember, writing your financial goals is about being in control of your life and focussing on what you want.

Tips for writing goals

1. To document your biggest goals, they must be:
• Specific – be clear about your goal
• Measurable – know when you will achieved it
• Realistic – you need to believe it is possible for you to achieve

2. First and foremost you need to document WHY you intend to achieve the particular goal, and make sure that when you write your ‘why’ that you get excited just thinking about it, otherwise it is just a want or a nice to have and you will not put the effort or commitment into achieving it.

3. Once you know your big goals then set smaller goals or milestones under these larger goals to assist you to achieve them. This gives you the steps to get what you want which makes it so much easier because you know what you have to do to get there.

Getting what you want

Let’s say you would like to buy an investment property to start building your wealth. Your larger goals might read something like this: I will buy a rental property in the next three years, and your ‘why’ could be that you want your children to have a private school education in ten years and this investment is going to fund it.

Let’s say to achieve your big goal you have worked out that you need to save 10% of your income for the next two years to build up your savings for the deposit for your property. A smaller goal or milestone could read: Before the end of this month I will set up a budget for the next 12 months. This allows you to set another milestone; I will save $10,000 in the next 12 months.

Unfortunately, most people don’t understand how much they can afford to put away into their investments and as a result a lot of their money is spent on impulse purchases, hence the need for a budget.

Although initially you may not like the idea of creating a budget, once you see the power of what it can do you will never want to give up that control over your finances again. Further to this, you now have smaller goals to support you in achieving the larger one which helps keep you excited about the steps you are taking as your will see how you can achieve what you want.

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