Have You Set Financial Goals?

Written on the 5 August 2014 by Janet Culpitt

If you were to retire tomorrow, how much would you need to provide you the lifestyle you want after all those hard years of working? And remember that amount has to last you 30–40 years.

What is the Wealth Paradox?

Simply explained, the Wealth Paradox proves that around 80% of Australians get to age of 65 with less than $100,000 in assets outside their family home. Only 10% of people get to age 65 with more than $500,000.

Are you  thinking: oh no, find another topic and move on, this is getting too complex or boring and I’d rather not think about it as I’m not even ready to retire yet?

Okay, but while you have money coming in, you should be managing it and planning ahead.

Living from day to day and paying the bills is not really money management. It is spending and meeting commitments.

We all do this, but there comes a time you begin to think about a specific thing you need to save for, such as a new fridge, a TV or even a holiday. This is when Money Management (financial planning) really steps up to the mark – you have to put some of your income away (SAVE!) so this would usually mean spending less in a particular area, as the commitments still need to be met.

How do you start saving?

• To save you must spend less than you earn (this includes loan commitments and credit card payments).
• Setting a goal to save for is always the best place to start.
• Know where you are now or how much you have, then determine how much you need (total amount required, such as cost of the holiday).
• Develop a strategy or budget to get you there, within the desired time frame.
• Monitor your progress during this time frame to ensure you stay on track and that you are moving towards meeting that goal.

The above is a fundamental financial plan.

From this you can think ahead and begin a bigger plan that complements your working life and begins a plan for the future.

On a scale of 1 to 10, where are you now? (With 1 being no direction or plan, and 10 being Financially Independent)

How important is it to you that you move up that scale?

Please use the comments section below and refer to other readers’ comments as you will see that this is something that affects everyone, and sharing the basics can be empowering to get you motivated and want to be successful financially.

Do not let the Wealth Paradox claim you as a statistic in that 80% of non-achievers.

 

This article was originally published on Women's Network Australia - www.womensnetwork.com.au/blog/have-you-set-financial-goals