The best way to score a goal? Straight in front, with a clear line of sight, and a strong commitment towards nailing it. Kicking your financial goals through the posts is no different.
Setting your financial goals can be daunting, particularly if you’re saddled with debt.
However, there are some straightforward ways to get your planning on track. You need to make them clear and achievable, and then support them with a powerful plan of attack.
By following the steps below we can help you set clear and achievable goals, create a strategy to achieve them and, in no time at all, start working towards your ideal financial future.
Step 1: Talk to the people who matter
If you are married or in a long-term relationship, it's critical that you discuss your financial goals with your partner. If you don’t share the same vision for your finances, you will have a far lower chance of achieving it. Further, the likelihood for conflict increases dramatically if you aren’t on the same page about money.
Talk sensitively about what you both hope to achieve, and the kind of sacrifices you would be comfortable to make to get there. Working this out from the start can save you a lot of headaches in the future.
Step 2: Set short, medium and long-term goals
Not all goals are created the same, and setting short, medium and long terms goals will help you feel satisfied and rewarded throughout your savings journey.
A short-term goal is something you can achieve relatively quickly, in a few months or a year. Saving for an engagement ring or a holiday might be important short-term goals.
Mid-term goals are things you need several years to achieve. They're often milestones towards greater wealth – for example, saving for a down payment on a house.
Your long-term goals are those which you will aim to achieve throughout your working life. These might be your retirement fund, paying off your mortgage, or paying for your child’s schooling.
Remember that while having a savings goal is great, current debt obligations might prevent you from making the contributions you want. As part of your goal setting, you should make paying off your debts a high priority.
As part of your goal setting, you should make paying off your debts a high priority.
Step 3: Make your goals SMART
You may have already heard of the old SMART approach to goal setting. It emphasises that goals need to be Specific, Measurable, Achievable, Relevant and Time-bound.
Having SMART goals is an effective way to be more focused and motivated, and gives you helpful boundaries to work within.
So, instead of just coming up with a savings figure, you should consider how many years it will take, how much you’ll need to put aside each month, and which goals should be prioritised.
Step 4: Make a budget
Once you’ve established your goals, you need to work out how you’re going to achieve them.
The best way to do this is using a budget.
The Australia Securities and Investment Commission's (ASIC) MoneySmart website has a user-friendly tool which can be used for all kinds of personal budgets.
Just put in your income and expenses and the budget planner will work out how much you have left over to put towards your savings.
How do I start?
Financial planning does not come easily to everyone, and if you have debt preventing you from getting ahead, it’s useful to speak to someone with the knowledge to help you outline the best next steps for you.
In fact, with the support of Bees with Honey, your employer is well-placed to help you grow your financial understanding and make plans for a strong financial future. As a starting point, check out our blog.