Why you should be setting financial goals
Life is what happens when you’re making plans. But what if you haven’t made any financial plans for the future – what happens then?
Whether you want to finally pay off that credit card or save for a home deposit, having financial goals can help get you there. We explore why you should be setting financial goals, no matter what life stage you’re at.
They help you see the big picture
You can’t start to change things up in your financial life until you know what you’re working towards.
To help you see the whole picture, start with smaller, more manageable goals with the idea to build up to long-term ones in the future. Some ideas for more modest financial goals may be to go on holiday at the end of the year or buy something you’ve wanted for a while. Longer term goals may be to own your own house one day.
No matter what your financial goals are, making them clear can help you start taking positive steps towards achieving them.
They help you pump the spending brakes
Once you know what your goals are, you can start seeing where your money isn’t working for you.
Having established goals will help you better analyse your spending habits and start forming good saving ones in their place. To make a savings plan, sit down and take a good look at your spending habits and see what you could cut back on. For example, if you’re spending $15 on lunch every day – that equates to nearly $4,000 on bought lunch per year!
Your savings habits will also be directed by what your goals are. For your smaller goals, you may only need to save a bit more from your regular pay to achieve them. If you’re motivated to achieve a bigger goal, you may need to pump the brakes on your spending even more.
They help you strategise
Everyone’s financial goals will be slightly different. The same thing will be true for strategies to achieve them.
Smaller goals often come down to a relatively easy analysis of your spending and saving. Larger goals can be a bit trickier. To save for a house you may need to think more about your larger career trajectory, paying down debt, as well as other investments.
If your savings goals are more ambitious, one strategy may be to tackle your debts systematically. By starting with the smallest debt first (say a credit card) and working up to your larger ones, you’ll be well on your way to improving your financial health.
Your strategy is your road map to achieve your goal. Follow the right path and you’ll be celebrating a financial victory in no time.
Ready to set some goals?
Setting financial goals can help energise you to think big and plan for the future. If you’re ready to start putting your ambitions into action, we’re standing by to help make it happen.
Contact the Advantage Consulting team to learn more about goal setting and working towards your financial future.