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How to set and track your financial goals

Mar 09, 2020

Do you set financial goals? 

Setting financial goals provides you with direction, you know what you are working towards or what your money is working towards. You have a clear focus, clarity and it gives you control. Setting goals can also give you motivation as you are striving to achieve something. 

When you set yourself financial goals you are making a plan for your money. You determine what you want your money to go towards, what you want it to pay off or what you might be saving it for. 

 

There are lots of different financial goals you can set. Here are the top 10 financial goals most individuals have:

  1. Saving for a house 
  2. Starting a business 
  3. Paying off debt 
  4. Saving for retirement 
  5. Saving for a holiday 
  6. Building an emergency fund 
  7. Paying off a credit card
  8. Saving for a car
  9. Saving for preschool/daycare/school/university fees 
  10. Saving for other large items 

 

Once you have your goal in mind you need to be able to actually set it, track it and achieve it. 

Here is how I set and track my financial goals. 

When I set any financial goals, I always follow the SMART principle: Specific, Measurable, Achievable, Realistic and Time-bound.

 

  • I work out what I want to achieve, be SPECIFIC for example - pay off credit card debt of $1000

 

  • I then write the goal down - When you write it down you can visualise it and you know exactly what you are working towards.

 

  • I always make sure I can measure my goal and keep a track of it - I use my bank's app to track my goal. I set up a goal inside and work towards it. 

 

  • Set an achievable and realistic time frame to achieve the goal -  for example, I want to pay off the debt within 6 months, so by the 30th September 2020.

 

  • I always make sure I stick to the time frame I set - that way you will work hard to make sure you achieve it by that date and not extend it and extend it and possibly never achieve it.

 

Financial goals can be both short term or long term goals. 

Short term goals are those you want to achieve in the near future. That can mean today, this week, this month, or even this year. A short-term goal is something you want to accomplish soon.

Long term goals are those you want to do further in the future. They require time, planning and usually take 12 months or more to achieve.

 

It can be difficult to keep yourself accountable and actually follow through with your goals. So here are my 5 top tips to help keep yourself accountable when setting your financial goals:

  1. Write it down and visualise it
  2. Ask a friend or family member to help keep you on track
  3. Reward your accomplishments and milestones
  4. Make sure you are in the right mindset
  5. Use an app to help you track your goals

 

These tips and tricks will help you on your journey to setting and achieve your financial goals in 2020.

 

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