Achieving Financial Goals

I'm often asked my clients about financial goal setting and given that it's the first day of 2017, this is a good time to review your finances and ensure that you are on track to reaching your goals! Whilst I am not a financial planner, the information contained here provides general ideas and some tools that should be able to assist you.

For any person who has successfully achieved a goal, whether it be financial or not, they will describe for you a three step process:

1. Setting your goals by clearly identifying where you want to be.

2. Planning how to reach your goals.

3. Reviewing your progress.

STEP 1 - GOAL SETTING

The first step for any successful financial goal setting is to clearly identify your goals and make certain they are specific. Also, choose a series of goals, being short term (within the year), medium term (in 2 to 5 years) and longer term. For example, you might wish to ultimately own your home outright, purchase an investment property to increase your retirement wealth, and must also fulfil your promise to finally take your children to Disneyland! In this example, your short term goal would be to save funds for the Disneyland trip, your medium term goal to purchase an investment property and your long term goal to entirely pay off her own home loan.

STEP 2 - PLANNING

The setting of goals is very important as without the goals, you can't create the plan to get there! Which leads us to step 2 in the process, to decide how to reach each of your goals. When considering financial goals, this usually involves saving and budgeting. I've created a worksheet that can assist in this process which can be found in the complete article at this link.

STEP 3 - REVIEWING

The world we live in is forever changing and unexpected circumstances occur - some good and some "not-so-good"! We have to factor these into our plan to achieve our goals. If for example, you receive a small cash windfall such as a bonus, this will most likely ensure that you are closer to one or more of your goals. However, if your dishwasher breaks unexpectedly, you might have to use some of your short term savings to replace it! The key is to regularly review your plan and assess the changes made. Don't give up on the goal, but re-calculate how to achieve the original goal.

More detailed information is available here at my website, along with an Achieving Financial Goal Worksheet which allows you to define your goals and accurately plan for them.