Money Mastery: Setting Goals for a Fulfilled Life

In our previous blog, we uncovered the numerous benefits that a financial plan brings to our overall well-being. From providing a sense of security to fostering peace of mind, a well-thought-out financial plan acts as a compass, guiding us through the intricate paths of life.

Now, let's delve deeper into the very heart of this financial roadmap—setting financial goals.

Let me drop some statistics for you:

"80% of people do NOT set goals for themselves." (reliableplant.com)

"You are 3x more likely to achieve your goals if written down compared to having no written plan." (Harvard Business)

"You have NO chance of reaching your goals if there is no plan" (Greg Cadogan)

Ok, I have no proof for the last one but that is exactly how I feel based on my experience and observation. (lol)

What exactly are financial goals?

A financial goal is more than just a monetary target; it's a destination on your life journey. These goals capture your aspirations, encompassing everything from short-term objectives like paying off debts or creating an emergency fund to long-term dreams such as homeownership, world travel, or a comfortable retirement.

Imagine your life as a story, and financial goals as the plot points that add substance and direction to the narrative. They provide a sense of purpose, and an organized approach to managing your finances. Whether you're navigating the complexities of daily expenses or envisioning your dream home, financial goals serve as the compass that guides your decisions and actions.

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Breakdown your Financial Goals

When setting financial goals, it's essential to categorize them based on their timeframes. Simplifying this process into short, medium, and long-term goals provides clarity and helps in crafting a focused financial plan.

Short-Term Goals (1-2 Years):

Achieving short-term goals provides a a crucial source of immediate gratification, fuelling the momentum needed to persevere on the path towards long-term success. It could also wield a profound influence on your mindset while playing a supporting role to your longer goals.

Take for instance, building an emergency fund: while its primary purpose is to cushion against unforeseen expenses, achieving this goal triggers a powerful mindset shift. It instils a sense of control and security, empowering individuals to navigate their financial journey with confidence. An emergency fund serves as a buffer against unforeseen expenses, safeguarding long-term investments and retirement savings.

Medium-Term Goals (3-9 Years):

Medium-term financial goals serve as the crucial link between short-term achievements and long-term aspirations, providing both a sense of continuity and a confidence boost along the way.

Consider the goal of purchasing a home: while it represents a significant milestone in itself, its attainment also signifies progress towards larger objectives. By strategically planning and saving for a down payment over several years, individuals not only lay the groundwork for homeownership but also gain confidence in their ability to reach more ambitious long-term goals, such as retirement planning or financial independence. This sense of progress and accomplishment acts as a powerful motivator, reinforcing the belief that even the loftiest of financial aspirations are well within reach with grit and diligent planning.

Long-Term Goals (10+ Years):

Long-term financial goals stand as the pinnacle of our aspirations. These are the goals that feels frightening, almost impossible, as it should. Lol

Why shouldn’t we dream big?

“Most people overestimate what they can do in a day, and underestimate what they can do in a month. We overestimate what we can do in a year, and underestimate what we can accomplish in a decade.”

- Matthew Kelly

I like this quote because many times we get bogged down because we become overwhelm by our lofty dreams that we try to cram in 1-2 years.

Let's say, you want to become financial independent: while it may seem hard to do this year or the next. Planning from now and breaking down that plan into small objectives will increase the possibility that you will hit that goal within your long-term horizon. Each contribution towards retirement savings serves as a reaffirmation of your ability to achieve enduring success.