Steps to achieve your financial goals

by - September 07, 2016

Research shows that 10 – 15% of a person’s income simply “goes missing”. 
In this age of consumerism, social media and easy credit access, keeping your financial objectives front of mind is the best way to save you from yourself and help you get want you want, says Alexander Forbes Financial Planning Consultant Mark Hawes.

“This will help you get what you really want – rather than what your surroundings keep insisting that you just ‘have to have’.  After all, if you don’t know what you want, how is your money supposed to get it for you?

The reality is if we don’t decide for ourselves, someone else will. This is often how we end up working so hard just to pay our bills - for things that we may find difficult to find the value in, rather than the lifestyle we aspire to.

 The first step, then, is the obvious one: Take stock – do your budget. The first reason to budget is to find the “missing Treasure”. Research shows that 10 – 15% of a person’s income simply “goes missing”. This is money we spend that we don’t keep track of such - daily meals from the office canteen and in-app purchases.

Unfortunately this first step is often skipped over and we end up putting together a monthly budget that is idealistic rather than realistic. This more often than not does not reflect our current actual spending habits, which is often the main reason why we can’t stick to our budget – because we don’t know what is honestly going on.

If you are spending more that you are earning you are headed for tough times. Be honest and write down all your expenses, especially the little ones that you don’t consider important or significant.
Until we can account for how we actually spend our money, it is nearly impossible to put a sustainable plan in place to improve our financial situation. Therefore fiscal discipline comes from the effective management of our money.

A simple high level way to do this is to go through your monthly bank statement and look at your transactions. Try account for each transaction and, especially, each debit order. If you are not sure what a debit order item on your account is ask your bank. Getting the full information is the only way to make informed decisions and the only way to take control. Where the debit order is for a small policy you had forgot about or didn’t even know you had, it probably means you don’t need it or even want it.  This expense could be better spent on settling debt or saving toward something you do actually want.

Once we have a grasp of our money and lifestyle we can then begin to map it to our objectives and desired lifestyle. By finding where your money is actually going you’re now in a real place to refocus your expenses toward what is actually important to you and have your money work for you, rather than you just working for your money. You can now put money toward your real goals and or more important areas of your life, such as saving toward your children’s education, your annual holiday, or emergencies as well as possibly paying off short-term and long-term debt permanently.

Working with a qualified financial advisor will help you put together an effective and efficient financial plan that can realistically and sustainably achieve your personal lifestyle goals. The regular review of the plan with your advisor can also be used as a good way to measure your progress on your path to reaching your goals and securing your financial well-being.  

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