YBR

Setting your own financial goals

In this article:

Being clear on your goals makes it easier to stay on track. But how do you get started?

When it comes to goal setting, it can be hard to know where to start. We all have different ideas and dreams of what we’d like to achieve further down the track - but they seem overwhelming. Perhaps it’s your dream to buy your own home or your first investment property – but how?

And with a goal that big, where do you even start?

Step 1. Be clear on what you want to achieve

It’s easier to pick specific goals than a vague ‘get better with money’ kind of approach.

Is it paying down debt, increasing your retirement savings or booking a big holiday? Seeing it in your mind’s eye means you have something to work towards.

Once you have your goal in mind, write it down! And some details, so that instead of saying  ‘I’d like to retire comfortably’, you think about what that means. Eating out, going overseas, buying gifts for the grandkids?

Or if you want a holiday, think about the sights, sounds and places that are on your list. ‘Drink cocktails on a beach in Bali’ sounds more motivating than ‘go somewhere warm’.

Having a big goal also means you can break them into smaller goals.

For example, a goal to put an extra $1000 a month into your super account sounds much less daunting than saying you want to save $12,000 a year or $120,000 over 10 years.

If you’re still having trouble determining your goals, a great tool to use is the SMART framework. It outlines the 5 things that make a goal easier to achieve.

Step 2. Prioritise what’s important

It helps to decide which financial goals are the most important to you. If we’re not careful, trying to split our time and resources between too many goals at once can be both overwhelming and disheartening. Try to rank all of your goals, from most to least important.

A good way to prioritise your goals is to ask yourself which goal will have the biggest impact or improvement on your current situation? Which goals are short term and long term?

It might be a dream to own your own home, so you’re saving for a deposit – but you also want to increase your super, pay off some credit card debt and travel with friends at the end of the year.  

So, what comes first?

Think about which one is going to have the biggest pay off for you in the long-term. If you’re planning to get a home loan, being in debt will negatively impact how much you can borrow. So, tackling the credit cards may be the best idea – and holiday plans might need to wait.  

In this situation it can help to speak to an adviser to help you work out how to get the best possible result in the long-term.

Take the first step

Step 3. Make a plan!

No goal is ever achieved without a plan in place. We all have the best intentions, but it’s easy to fall ‘off the wagon’. But there are things you can do to take control.

Creating a budget is key. Look at how much you have coming in and going out each month, and where it’s going. You’d be surprised by how much we spend without even thinking, so tracking your spend is a good exercise, even if it’s just for a month or two.

Making a budget is one thing, but sticking to it is another. Learning any new habit takes time and patience, so watch where you’re likely to go off track – whether it’s out on the town, splurging at the shops or being a sucker for an online sale.  

Consider creating automatic direct debits into a savings account before you get to spend it. This way you don’t even have to think about putting money away, it’s done automatically for you.

4. Review your goals regularly

It’s crucial to check up on your plan and goals regularly. Life changes all the time, so it’s important that you update your goals to reflect this. Whether you’ve received a new promotion or now have more expenses to meet, you should update your budget to reflect the changes in income or expenses so you can ensure you’re still meeting your goals.

Another tip is to track your progress. Just like weigh-in on a diet can keep you motivated, looking at your progress each month can help you stay on track and see your hard work paying off.

A great way to keep yourself even more accountable is to go through some of your plans and progress with a trusted family member, friend or financial adviser who can help motivate you and point out areas where you can improve.

In the end, when it comes to you and your financial goals, your biggest is asset is yourself. You can have all these different tools and people to help you on your journey, but it’s up to you to do the hard yards.

But when you’ve reached that goal, you’ll know that it’s definitely worth it!

Feature articles

Could watching The Bachelor make you smarter? Whether you love it or hate it, there are lessons about both love and money to be learned from the hit show.

4 easy steps to tackle your rising debt Where to start and what advice to follow can make a big difference when it comes to tackling debt.

Retirement Planning: when’s the right time to start? When you’re young, planning for your retirement seems like an issue for another day. Then, later down the track, we wonder if we started too late.

How to achieve a baby-friendly home loan Planning for a baby and a home loan? It’s possible to balance both if you know how.

View all articles



Enquire now