image by Chiara Bonetto

We hope you enjoyed our first blog on financial goals, if you missed it, here is a link to Financial Goals - What are they? (1/3)

“A dream without a plan is just a wish”

With the what ticked off, let’s dive into the why. Being successful with money, having financial stability and security for your family is extremely difficult to achieve if you do not set financial goals. Deciding how you are going to arrange your finances to achieve the life you want for your family and yourself, requires you to align your actions with your goals and financial objectives.

Here are 5 key reasons to set financial goals and how they’ll help you achieve the success you’ve planned:

Gives you direction

Defining financial goals helps you define what you are trying to achieve and what success looks like. Your unique goals allow you to set course for the end goal, allowing you to make key changes to your and your families circumstances along the way.

Gives you a plan of action

After you have defined your goals and have direction, it’s a lot easier to create a realistic plan to achieve them.

So for example, you have a long term goal of paying down your mortgage in 10 years. Start by breaking this down into smaller targets along the way. You could set a yearly target of paying down an additional 10% per year. This can also be broken down further into a monthly target. These smaller goals and milestones will help guide your financial decisions. So if it’s increasing your family income or cutting back on unnecessary expenses, these goals and milestones help you determine the methods that would best support your efforts in reaching them.

Gives you focus

Simply having goals helps you to keep your mind on the prize. Many don’t set goals because they fear failure, but failure is a necessary step to success and offers important lessons. Overcoming difficulties on your journey provides the focus and motivation to keep moving forward and keeps you on track.

Allows you to track progress

With a clear destination defined, it’s much simpler to keep track of all the milestones you should be achieving along the way. Being able to show this progress also gives you motivation to keep moving ahead. In addition to this, highlighting where you have missed targets will give the opportunity to make changes, reprioritise or devise an alternate plan or strategy.

Provides accountability and increases chances of success

Accountability leads to responsibility, it’s up to you to achieve them. Owning your financial goals will in the long term contribute to them being achieved. Make sure you record your goals and regularly revisit them, it also helps to keep them prioritised. Ask someone in your family to checkin with you regularly to discuss your defined goals - this will drive accountability even more. 

The long and short of it is this, setting financial goals provides the clarity needed to build the kind of life you want for you and your family. If you don’t define the outcomes you want, your journey towards financial freedom (if that’s your ultimate goal) will be significantly more difficult. 

The goal of this blog was to cover off the why of financial goals. Look out over the next few weeks for the final blog in this 3 part blog series where we cover the how to set financial goals. 

This blog series is dedicated to “das fibonator” 

DISCLAIMER:

This publication is general in nature and is not intended to constitute any professional advice or an offer or solicitation to buy or sell any financial or investment products. You should seek separate professional advice before taking any action in relation to the matters dealt with in this publication. Please also note our disclosure here