Have you ever set goals for yourself but failed to meet them? It may be to start exercising, investing, spending more time with your family members or loved ones, or whatever goals you may have.
You set goals at the start of the year but did not follow through in the following weeks or months. You only realize your goals as year-end approaches.
A study by Martin Oscarsson published online in 2020 on large-scale experience with New Year’s Resolutions found that 55% of the respondents successfully sustained their resolutions at a 1-year follow-up.
Therefore, it is possible to follow through on your goals by following these five tips to help you set and attain your financial goals.
Do you have a clear and specific goal for how much you want to achieve in financial goals?
It can be measured by savings amount, net cash flow or how much net worth or how much investment portfolio, how many like properties or how much reduction of debt or how much sum insured you would like to have at a certain time frame.
Clarity is power; having that clear focus on what you want helps give you that clear direction.
When you use your GPS, whether you are using Waze or Google Maps, the first step is to key in your destination. In your financial planning, you need to know what clear financial goals you want to achieve.
2. Compelling Reason
After you know what you want, the next thing is to know why you want those financial goals.
“ Reasons come first. Answers come second.”– Jim Rohn
Why do you need to achieve that goal? For what purpose? Is it for yourself or for others?
Having that compelling reason will pull you toward the goals that you set. You may face certain challenges/obstacles, but your stronger reasons will pull you back to the right track.
For example, by achieving that financial freedom, what would this allow you to do? Is it to live a comfortable lifestyle for yourself and your family? Is it to travel worldwide and create memories with your loved ones? Is it to start a charitable organisation?
Consistency is key to ensuring that you are getting closer to your goals. Don’t undervalue the small steps you take every day.
For example, by saving RM3 per day for 365 days, you will save around RM1,100 over one year. What if you put it in an investment vehicle that grows at a certain percentage?
For example, someone saving RM500 per month over 35 years with the assumption of an 8% compounded annual return will have over RM1.1 million at the end of that period.
Do you have someone accountable to you who helps you track and guide you in achieving your financial journey, be it your financial planner or someone competent enough to advise you on your personal finances?
It is like having a mentor or a coach who can advise you on the rights and wrongs.
5. Review and Measure
It is always good to measure periodically; it may be quarterly, half-yearly, or yearly, depending on the duration of those financial goals that you set. Knowing the actual results will allow you to make necessary adjustments to try out different methods to save or reduce unnecessary expenses that contribute to your overall financial goals.
Once you have your financial goals, the most important step is to take action either to create that investment account opening or schedule that appointment with your financial planner or what would the next things you can do.
5 Tips To Help You Set And Achieve Your Financial Goals
Every new year comes with optimism and new year resolutions. I hope that these tips will be able to help you set and achieve your financial goals.
About the Author
Goh Chee Yong is a Licensed Financial Planner under Capital Markets Services Representative License (CMSRL) and Bank Negara approved Financial Advisor Representative (FAR). Prior to becoming a financial advisor, he spent eight years working in Big 4 audit firms and multinational corporations. He is also invited to speak on financial literature at universities and public events. He can be contacted at email@example.com