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Financial freedom: setting financial goals that work
As we step into the New Year, it is the perfect time to assess our lives and determine what it is that we really want, both personally and in business or career. Financial security is an important aspect of life because it allows freedom to have and do what we desire. A valuable step towards financial security is setting financial goals.
What are financial goals?
A financial goal is an objective or target that individuals or businesses set for their financial future. They can be short or long-term and are often seen as the first step in sorting out your financial position. Makes sense, right? Because how can you get to where you want to go if you don’t know where that is?
Why are financial goals important?
Goals give you a line of sight to your best future. Setting financial goals can help drive long-term prosperity, reduce financial stress, provide clarity and structure, offer a clear roadmap and boost confidence. Without setting specific goals to achieve your envisioned future, you will remain stagnant and purely dream.
How do you set financial goals?
Firstly, what do you want to achieve, and what are your priorities? Determine this. Remember that you will not be able to do it all at once. Organising your priorities is a good start. The goals need to be SMART – Specific, Measurable, Achievable, Relevant and Time-bound (click here to read Bill’s article that explain these more).
For example, you want to pay off your credit card by December 2024 and can afford $500 a month without putting yourself under strain. You can easily monitor your progress.
Or perhaps you want to grow your business by 15% by January 2025. Do you have the support and staff to do this? Do you have the capital to do this? Is it achievable for your industry? Let’s say the answers are yes, yes, yes – you can set a strategy for growth, measure it regularly, adjust where needed and work towards your deadline. Let’s say the answer to the question is no – look at WHY. Is the percentage too high or unrealistic? Do you need more staff, more capital or help setting the strategy? Determine what needs to be tackled so you can move forward.
Things to consider.
- Learn from your past mistakes. Reflect on past decisions and goals to identify any patterns or obvious errors in your approach. Don’t make the same mistakes in the future. For example, you keep taking money out of your savings. The solution can be as simple as changing your online banking access to VIEW ONLY. Then, you’re left with the hassle of being on hold for 30 minutes to make the transaction. This can dissuade you from “savings theft”!
- Consider your providers – can you get a better deal? Whether you’re an individual saving for your first house or a business trying to reduce overheads, it’s important to make sure you are getting the best deal available. Can you consolidate your insurance policies for a discount? Or your loans for a better interest rate? Can you get an early payment discount? Should you shop around for a better supplier of services to your business?
- Ask for help. We can’t do everything and cannot be expected to know everything. If you feel overwhelmed with the goals, consider asking for help. Perhaps see a budgeting service, an accountant or a professional that can help with your strategy or structure. Any cost associated with this would be well spent if it helps streamline your tasks and makes the process easier.
- Revisit your goals regularly. It is advisable to revisit your goals on a regular basis to make sure they are still what you want and still achievable. Life can throw curveballs at us at any time, and it may be necessary to reprioritise on a personal or business level.
Financial goals will help you understand your position, plan for the future and give you some structure to work within. We have a number of experts here at Gilligan Sheppard who can help you set these goals and help you achieve them. Please get in contact, and we can have a chat.