A recent study found that 85% of people in Australia set financial goals for this year. This is a massive amount! And it is great to see. I wonder however, how many would have started on those goals already? Why? Because I have found often too many new year resolutions are made at the heat of the moment after a bottle of champagne.
It’s OK though! It is only early on in the year. In saying that, who says that a year cannot be measure from whenever you start to 12 months down the track? Right!? So if you are one of those people that want to make a difference in your financial situation this year let’s look at setting you up for success!
Figure out what it is you want to achieve – I often find that people can tell me what they don’t want much easier than what they do want. So if that is the case, no problems at all, write down all the things you don’t want and let’s see if the opposite fits. i.e. If you know you don’t want to be in debt anymore, than would the want as being debt free sound good to you? The reason I want you to look at it in a positive light is because ‘what you think about, you bring about’!
Now you may wonder how ‘I don’t want to be in debt’ brings with it more debt. Well it is because your subconscious mind doesn’t recognise words like ‘don’t’, as such it sees that message as ‘I want to be in debt’! So let’s focus on wanting to be financially free instead.
Make it measurable – so now we know we want to be debt free, but what does that mean in dollar figures? so add up the debt you need to pay off. If you have a car loan, credit card, mortgage etc. the total can sound overwhelming, but don’t fret it it achievable to get rid of them all!
Apart from paying these all off, being financially free may also mean to you that you want to be able to make the decision on having to work or not. So let’s look at this, what would you need to have in place to make that happen? Is that 6 months savings in the bank? Is that passive income coming to you, even in your sleep?
And if your plan is to save this year, that is great also. I recommend to clients to get rid of high interest before they start saving. There is no point on putting money into a savings account that gives you 2% or so, when you are paying out 20% elsewhere. Now I am not a financial adviser, but that is common sense to me.
Back to savings, if that is your plan for this year, then set your target. How much do you want to save? If it is for a holiday or your financial freedom account it should be easy to get the figure you need to achieve.
Break it down – as I mentioned it above the sheer number showing your debt balance may make you want to cry when you first see it, if so, let the tears out first, but then let’s get on with it. What is the smallest and quickest debt you can eliminate? Once you know the figure or if you have your savings figure, break it into a weekly amount. Say for example you wanted to pay off or save $1,000 in the 12 month period we are looking at, you would divide the $1,000 by 52 = $19.23 per week. This is the figure that you have to allocate toward you goal.
Make it happen – once you have that sorted, then create your payment plan. Make it automatic. If you can get your payroll department make the payment to the right account straight out of your pay pack, if not than you need to set it up yourself. And commit. If this goal is really important to you, you will find a way!
Do you want to make truly compelling and powerful goals? Watch our Goal Setting Masterclass.