What’s stopping you from reaching your financial goals?

What’s stopping you from reaching your financial goals?

1 April 2020

Reaching your financial goals can be challenging, but whether you’re looking to pay off a large debt, save for that dream holiday or buy a property, each is an ambitious goal worth striving for.

A recent study by ME Bank found that while many Australians are working towards common financial goals, only some are confident in their ability to reach them. Many of those interviewed listed the biggest obstacle to their financial goals as income (52 per cent), closely followed by cost of living expenses (48 per cent). While these elements play a role in preventing you from reaching your financial goals sooner, they don’t tell the whole story.

We explore three common obstacles that could be stopping you from achieving your financial goals, and how to overcome them.

1. You aren’t setting SMART goals

Setting good financial goals requires more than a vague resolution and general aims to reach it. It requires planning, structure and a healthy dose of discipline. With many Australians listing a lack of discipline as a reason for not reaching their financial goals, it’s something worth actively addressing. One way to do this is through the practice of SMART goal setting.

For example, instead of simply saying “I want to get out of debt” try applying some SMART principles. When redefined as a SMART goal, the desire to reduce debt can be reframed as “In the next 6 months I will save $2,000 to pay off my credit card debt. I will do this by setting aside $100 of my weekly pay into a separate account to my spending allocation.”

This goal is now:

  • Specific (credit card debt)
  • Measurable (easily tracked)
  • Achievable (possible to complete)
  • Realistic (the amount is reasonable)
  • Time-bound (within a 6-month period).

If you’re regularly tracking and progresses your financial goals, then you’re on your way to knocking down a major barrier to financial success.

2. You’re relying too much on credit

The temptation to put things on credit can often feel overwhelming. Credit cards are a part of our everyday life – we use them to pay for our bills, groceries and more high-end expenses. Unfortunately, our common reliance on credit could also be presenting a nation-wide barrier to financial success.

With approximately 1.9 million Australians struggling to handle their credit card debt, the surface-level convenience of tap-and-go credit is taking its toll. Taming a long-held reliance on the instant gratification of living on credit can be difficult, but it isn’t impossible.

First, you may need to change the way you use your credit card day-to-day. Instead of sticking with the card you already have, shop around to find one that suits your spending habits and a low interest rate. If you’re on the hunt for rewards and bonuses, make sure they’re worth risking extra interest payments for. Be sure to stay on top of your spending and pay your bill in full on time each month. If you’re struggling to make your credit card work for you, it may be worth speaking with a professional to help you get control of your debt.

3. You’re not receiving the right advice

According to a recent report from ASIC, demand for reliable financial advice amongst Australians is high. In fact, 41 per cent of those surveyed said they planned to seek financial advice in the future. And nearly 79 per cent acknowledged that financial advisers have expertise in financial matters where they lacked knowledge. While these figures clearly demonstrate that Australians recognise the need for informed and professional advice, finding the right advice for your situation can be tricky.

At Advantage Consulting, we’ve helped thousands of Australians to review their situation and apply winning tactics to reach their financial goals. If you’re looking for help to break down the barriers to your financial goals, talk to the team at Advantage Consulting today.

Disclaimer: This is general advice and has been prepared without taking into account your particular situation or needs. You should consider whether it is appropriate for you before acting on it.