Meet Financial Goals and Enjoy Financial Freedom
The paradise of your personal financial dreams awaits you. What does that paradise mean to you? Perhaps it’s the ability to spend and invest as you wish. Or maybe it’s freedom from debt! Or the ability to sleep well at night knowing that your child’s education can be paid for or that your retirement account is stocking itself up nicely. There, you’ve already defined your individual financial goals. Articulating them is the first step and the rest will follow from there, thanks to a smidgen of advice.
According to the Nielsen Global Survey of Saving and Investment Strategies, over one-third of Singaporeans believe that they will not be able to meet their money goals. Finding the inspiration to consistently work towards your personal financial goals can be pretty challenging, most especially if these goals are not truly yours. Personal finance needs to be personal! Everyone has their own unique aspirations, fears and attitudes when it comes to money. That is why it’s important to define those goals that are distinctly yours. Discover how you can create personal money goals that you can actually stick to.
Money Goals 1: List your life values and priorities.
Make a list of the things that matter to you the most. Think about the activities that you love to participate in and the things that make you happy. Is it family, home, friends, travel, education, career, business, charity, country, or all of the above? Once your life values are clear to you, it will be easier to nail down your financial priorities and create meaningful goals to achieve your targeted financial standing.
For example, if you are passionate about seeing the world and experiencing other cultures, you may want to allow a budget for annual travel expenses. Basing your money goals on your core values will inspire you and reinforce your dedication to work towards them.
Money Goals 2: Set specific goals.
When defining your goals, be as specific as you can with the monetary amount as well as the timeline. Allocate a fixed percentage of your salary to go into your savings and investment accounts. To help determine a specific amount and timeframe, prioritise each of your personal goals and ask yourself how soon you want to attain them.
When do you plan to purchase a home? How much do you need to save monthly in order to afford your dream house in ten, five or two years? How many children do you plan to have? How much do you need to set aside for their healthcare and education? When and where do you plan to retire? How much do you need to save in order to maintain your lifestyle after you stop earning?
Goals are easier to attain if you know exactly what you want and when you want it. If you realise along the way that your wants are changing, you can easily adjust your plan and reset your timeline accordingly.
Money Goals 3: Break down your goals into actionable steps.
After setting your goals, it is important to define how you would actually achieve them. Pare down your major goals into smaller, more actionable to-dos. Instead of simply thinking, “I need SGD 60,000 for my dream wedding next year,” come up with some little actions you can undertake to get you there. Is there an amount in your savings account that you can set aside now? How much?
If you need to save something from your weekly paycheck, how much does that need to be? Exactly where can you cut back in your expenditures to add to your savings? Do you need to increase your income by negotiating for a raise or finding a second source of income?
Setting money goals is only the first step in planning your finances. In order to successfully reach your goals, you have to map out how you can get there.
Money Goals 4: Make the process convenient.
You’ll be more motivated to work consistently through your financial roadmap by making the process easy. There are a lot of vehicles and tools that you can utilise to simplify various tasks. For example, automatic transfers are an easy way to conveniently move specific sums from your paycheck to your savings and investment accounts. You can set up the phone or email notifications to remind yourself of credit card statement dates and due dates.
Online financial calculators and budgeting apps are fine mechanisms to review your financial standing. Money Sense has a number of tools, including a savings calculator, debt calculator, mortgage calculator, net worth calculator and budget calculator.
Money Goals 5: Keep track of your progress, and reward yourself.
After all your hard work in assessing your values, setting specific goals, breaking down those goals into actionable steps along a timeline, and then actually following through on your to-do list, do not forget to reward yourself. Give yourself a simple treat whenever you achieve a financial goal to encourage yourself to keep going.
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