Let's face it, although money doesn't buy us happiness, money does buy us options. It can buy a bit of freedom. Freedom to live your life a bit more independently, freedom to pursue your dreams (be it traveling, going back to school, or putting a down payment on a home), or freedom from the every day grind.
Some of your financial goals may be to graduate from your undergraduate degree without debt, to pay off your student loans in X number of years, increase your net worth by 10% next year, or even to save up $50,000 for a down payment.
Whatever your financial goal is, you have the power to make it happen and to achieve your financial dream. No matter how big your financial goal is, you could achieve it if you put your mind to it.
Here are a few tips on how you can achieve this:
Write Down your Financial Goals (and Share)
First, you obviously have to identify your financial goal. Make sure that it is SMART (Specific, Measurable, Attainable, Realistic, and Timely). Write down your financial goal and keep yourself accountable. If you want to add extra “oomph” into make your financial goals a reality, tell other people what your financial goal is.
This helps break down the stigma of money being a taboo subject to talk about and may even help you achieve your financial goals even more by having your friends or family who you are divulging your financial goal to share their own financial goals with you. Everyone has different financial goals in life and everyone is on a different “path” with their financial goals.
Even in the close knit group of girlfriends I am with, there is a variety of different financial goals. One wanted to get out of consumer debt, another wanted to have a sufficient down payment, another wanted to increase her net worth by X number of dollars, and another friend wants to increase her investing knowledge beyond mutual funds in her RRSP.
Figure Out How Its Going to Happen
Back to going to the SMART goals, you want to make sure that your goal encompasses all of these attributes. You basically need to develop a plan on how you are going to get from where you're at right now to where you want to be when you reach your goal. Talk about your goal with your significant other.
If you want to save $50,000 for a down payment between the two of you within the next 4 years, that's $12,500 per year, or roughly $1000 per month. Seems lofty but can be achievable if you put your mind to it.
Figure out where you are spending most of your money and adjust accordingly.
Achieving your Goals Means Sacrifice and Compromise
Just like with relationship goals (e.g. marriage or long term relationships) you need to add in sacrifice and compromise for your financial goals. Any goals really. There is always give and take with everything in life.
Take the $1000 a month to reach $50,000 down payment in the next 4 years. There will be aspects of your life that you probably don't value as much as the down payment. Take for example, cable. Do you need cable? There's $100 a month saved. Do you need to eat out three times a week? That's another $200 saved if you typically spend $15 per meal (per person).
Can you get rid of some things around your current home that you don't need? Sell old jewellery from hated ex-boyfriends?
Really, anything is achievable if you put your mind to it. Creativity is the key.
When you work really hard to prioritize your financial goals, achieving your financial goal is so much sweeter. We don't appreciate what we have until we realize how difficult and how much sacrifice there was to get there.
The scariest step is the first step. Sometimes when your dreams are so big or span so many years, it can be daunting to go ahead and take the plunge. But you don't have to take the plunge. You just need to dip your foot in the water, so to speak. Baby steps!
Start off small, take it one month at a time. Don't beat yourself up if you didn't achieve your mini-goal for this month. Trust in yourself that you will get to your goal.
It's the power of positive thinking, remember?