In order to get to where you want to go you have to know where you are going and this involves goal setting. Even if you do not set goals you will still end up someplace. Even those who ended up in the poor house started their journey someplace. Choosing where you want to go involves goal setting otherwise your destination will be chosen for you.
Setting financial goals
Written by R. A. Stewart
Getting all of your finances in order takes a bit of give and take as far as deciding what you have to give up in order to achieve something else. If all our dreams came true we could buy anything we want when we want it but we do not live in our ideal world so we need to decide on what our priorities are.
In today’s world where getting one’s foot on the property ladder is unachievable for a lot of young people under their current circumstances, they need to find another strategy. These same rules apply whatever the circumstances and that is getting into the savings habit and investing money is important. If you are a New Zealander then I cannot stress enough how important it is to join the NZ retirement scheme kiwisaver. With all of it’s incentives such as the free government money and employer contributions this is a no brainer. Plus you will be able to use part of your kiwisaver for a deposit on your first home providing you have been with a kiwisaver for five years.
If you are from another country then your retirement scheme will have different rules and schemes.
A multitude of factors will determine your financial goals but the main ones are:
YOUR AGE
If you are young then you have the luxury of time on your side and make time work for you. As the saying goes, “It is time and not timing which is the key to making money in the markets.”
YOUR FINANCIAL SITUATION
If you are in debt then your number one priority needs to be getting out of debt especially if it is consumer debt. That is debt on stuff that you don’t need such as a TV set, lounge, videos, and other appliances. “If you don’t have the money to buy such items you don’t buy it,” is a good philosophy to have.
The money that is spent on luxury non essential items can be better directed to building your wealth.
YOUR MARITAL STATUS
This is an obvious one but your marital status is a major factor in determining what your life goals are going to be because life is not all about you because there is another person in the picture; this means that you both have to be on the same page.
So how can I achieve my goals with x amount of money in my pay packet?
1 Increase your income
2 Reduce spending
3 Sell stuff you no longer need
INVEST YOUR MONEY
Invest your money don’t just fritter it away like most people. An increase in your wages and salary should be invested unless ofcourse you are living from paycheck to paycheck. Set savings goals with long term, medium term, and short term savings goals depending on what you are saving for.
The timeframe for when you require the money is a factor in determining where you are going to invest the money. You certainly would not invest in growth high risk high return stocks if you needed the money in the short term.
EStablishing good habits while young will help you later on.