Last week we spent time thinking about our financial dreams. A dream will however remain a dream unless you convert it into a financial goal, create an action plan and start taking action to achieve those goals.
Financial goals are different for every person. Your goals might also change as you grow older or become more financially stable. One person might dream about driving an expensive German car and owning a game farm, while the next person wants to get through the month without having to stress about money. It doesn’t matter what your goal is, but you need to have a goal. Without having a set goal, you will just continue to float through life. Goals give purpose and direction. Goals force you to thrive and not only survive.
The very first step in financial goalsetting is to write down your goals, but write it down in a SMART way:
- Be Specific – define clearly what your goal is. “I want to get rich” is not a goal. Define what “rich” means to you. For example: ‘I want to buy my first house’.
- Measure it – set smaller milestones that you will be able to measure. For example: ‘I want to save-up the deposit by the end of this year’.
- Be Achievable – dream big but be realistic. Your goal must be achievable to keep you motivated. For example: Maybe your ideal home is a double-storey home with a big garden and a swimming pool, but maybe you won’t be able to afford it in the given time. Then you should maybe first invest in a townhouse and upgrade to your ideal home later or when you earn more money.
- Be Relevant – it should be relevant to you; what is your personal financial goal. It should be something that inspires you. There is no point in making the neighbour’s goal your goal.
- Set Timelines – set timelines by when you want to achieve what. For example: ‘I want to save-up a deposit to buy my first house by the end of this year and buy my new house in two years’ time when I have enough money to pay for the transfer costs as well’.
Spend time thinking about what your financial dreams are, if you don’t know already. Once you know your financial dreams, covert them into financial goals. Go write down your goals and make sure you have set each goal in a SMART way as explained above. If you write it down, it creates a sense of responsibility and you will be more likely to achieve it. Setting your SMART goals will also help you to compile a plan to achieve those goals.
Download your FREE Financial Goalsetting Workbook to help you get going.
Written by Ronel Jooste
CA(SA) and Financial Coach
Contact Ronel: firstname.lastname@example.org
For more information about my financial wellness programmes visit the website