It’s that time of year again when we whip out our diaries and start day-dreaming about all we want to achieve in the new year. It’s a great habit and certainly one that I would encourage, but all too often we give up or abandon the goals after just a few months. What goes wrong then and why are we so bad at setting financial goals? Let’s look at how to set goals and achieve them.
One big problem with setting goals is that life is unpredictable and our rigid goals with specific dates and values often become unachievable when life throws little curve-balls. We need to rethink how we set goals and how we manage them as they provide valuable focus and direction in life.
So then, how do we set goals that we can actually achieve?
This is such a difficult one to master. On one hand you need to challenge yourself and set a goal that will be worth your efforts but on the other hand you need to be realistic about what you can do.
Financial goals are generally either about saving a certain amount of money, or earning a certain amount (or a combination of both). However, if you currently earn R10,000 per month, chances are slim that you’ll suddenly be earning ten times that amount.
Motivational speakers and evangelical pastors will tell you to simply believe in yourself and break the barriers of your limited mind. But folks, let’s be real! Life is not that simple and we can’t just wish money into existence. If that was the case we’d all be millionaires.
So, assess your situation, your earnings, debt, savings, etc and set a goal that will challenge you but that is not impossible. You don’t need to know exactly how you can achieve the goal but you should be confident that it can be achieved. It should be scary and exciting!
Accept changing circumstances
One of the crazy (and sometimes annoying) aspects of life is that it’s forever changing and that life is completely unpredictable. See my thoughts on planning for retirement in uncertain times.
It is crucial to not only accept changing circumstances, but to embrace them! The longer you resist change that is inevitable, the harder you make life.
If circumstances change and your goal suddenly feels impossible, assess the situation and change your goal accordingly. You never know, but life could change again in a few months time and then your goal may seem feasible again.
Don’t be harsh on yourself when events happen which are beyond your control. Simply inspect, adapt and move on. The key is to keep focussed on what you can achieve even it it may be different to the original goal.
Make your goals count!
Whatever your goals, make sure that they are meaningful to you and that you are in fact motivated to meet them. Try to think about what it would mean to you if you achieved your goals, what would you feel like and what would you want to do to celebrate?
Write these things down and remember why you are doing things. It’s pointless to set goals just because they sound good or because you read some stuff on a blog. Make sure that you really want to set and achieve them.
This way you’re far more likely to stay focussed on your goals. Oh and by the way, see some tips on staying focussed & motivated.
How to set goals and achieve them
You need to be realistic about what you can achieve. This doesn’t mean that you only set boring goals that you know are easy, but rather that you set challenging goals that are actually possible (somehow). Goals that are impossible will only end up demotivating you and making you feel that you can’t achieve anything.
Then, accept change and deal with it. Instead of giving up on goals you are allowed to adjust them a bit.
And finally, make sure that the goals are meaningful to you! Question yourself as to why you want to do certain things. Understanding your why is very important!
So Brendan what are your financial goals for 2019?
I haven’t finalized my goals yet but they relate to paying my bond off, additional income and also sorting out my emergency fund as it got depleted recently.