As we say goodbye to 2015 and look forward to 2016 the start of a new year allows us to stop and contemplate what we hope to achieve in the upcoming year. This includes financial goals.
The first step is to “dare to dream”. Dreaming allows us to identify what it is in life that we actually want. Perhaps it is having the choice to go to work or not. Maybe it’s as simple as paying off the mortgage or having the ability to take regular family holidays or updating the car every 1 - 2 years. Whatever your dream is you need to take the next step to make it a reality. You need to turn it in to a goal.
The best way to set goals is to write them down. A long term study carried out in the US asked a class of university students who had written specific life goals down. While many of the class had goals only about 5% of the class actually had them written down. 5 years later the follow up study was carried out and of those 5% that had written down their life goals – 100% of them had achieved them – within 5 years! The statistics amongst the remaining members showed that less than 5% had achieved their goals.
The next thing to do is set a realistic time frame in which to achieve this goal. There is no point in saying “I will pay off my $200,000 mortgage in 2 years” when your income is only $30,000 per annum. Putting unrealistic time frames only sets you up for failure. By all means make it challenging but make it achievable.
Then break your overall goal down to bite size chunks. Using the above example you may decide you want to pay off your $200,000 mortgage in 5 years. Break this down to an annual figure ie $40,000 per annum. Or even a monthly one of $3,333 per month.
