Episode #33: 5 Money Goals To Achieve This Year
I’ve always loved goal setting exercises and working towards ticking things off my list, and there’s no better way to rocket yourself ahead in life than by setting and working towards some solid financial goals. And if you felt overwhelmed when I mentioned setting and completing financial goals, that’s completely okay and I’ve got you covered, because in today’s episode I’m going to tell you the 5 personal finance based goals that you should be setting for yourself this year. So, if you’ve been feeling lost about where to even begin getting on top of your finances, make sure you catch this full episode to learn the 5 finance goals you should be setting for yourself to start to feel calm and in control of your bank account.
Financial Goal #1: Make Sure That Your Emergency Savings Account is Fully Funded.
Before you roll your eyes at me and say ‘I’ve heard this already’ and ‘I already have an emergency fund’, if you haven’t recently reviewed your annual expenses then chances are your emergency fund needs a top up. Either a) because you’ve started to spend more on your life (thank you covid revenge spending), or b) because inflation happens and your cost of living has been slowly increasing bit by bit since you first created your emergency fund. So, whether you’re starting from $0 and need to build your fund up from scratch, or if you already have a complete emergency fund, the first goal on your list is to figure out how much money you need to have in your emergency fund and to build up your account to that level. If you want to set this as a goal for yourself but you don’t know where to start at all, then check out this video all about how to save money for your emergency fund more quickly.
Financial Goal #2: Start Investing.
Using wealth building tools like investing is really the only way to take the money you’re saving for retirement and help it grow into an actual viable amount of money that you can comfortably live on in retirement. We’re all told we should save for our futures, but the idea of investing for our futures is seldom discussed. And the thing is, when you really sit down to look at how much you can reasonably save over the 40 working years of your life, and then compare that to how much you want to live on with our retirement, you’ll realize that those two numbers seldom add up. It’s almost impossible to simply save all the money you need for retirement, and that’s why it’s necessary to invest and use wealth building tools to grow the money that you’re saving.
Let me say that again, it’s not enough just to save, you need to work on growing the wealth that you’re saving, and one of the easiest and more accessible ways to start doing this is to invest in the stock market responsibly.
If you know absolutely nothing about investing right now then the very first lesson you need to understand is that time is your most valuable resource when you’re investing. You’re much better off to start saving small amounts of money early, than trying to save large chunks of money later in life. This is because of a factor called compound interest, and the magic ingredient that gets compound interest to work best, is time. The longer you’re invested in the market, the longer compound interest will have to grow your money. I recommend looking at this episode all about the basic rules of investing, as well as this episode about common pitfalls to avoid when investing.
*I want to add a caveat to this goal. If you’re not financially secure yet, set this goal for a later date because you absolutely want to have these three things ticked off your list first : 1) having your basic life needs met financially 2) you need to have an emergency fund 3) you need to have paid off all your high interest debt (this means consumer debt like credit card debt or anything else with interest rates in the double digits). After that, then absolutely make this one of your goals, start investing sooner rather than later.
Financial Goal # Find A Way To Increase Your Income.
So much financial advice is centered around ways to save money and spend less than you make, but we almost never talk about looking at ways to increase our income. This is one of the best ways to build a solid financial foundation. When I first started my working life, I knew that I was frugal as heck, but I also knew that I wanted to save money, start investing early, buy property, and live comfortably. It was clear that no matter how frugal I was, there was no way I could do that on a starting salary at a normal job of somewhere between $30-60k a year. So, I came up with some business plans, ran some numbers, and chose to launch a business that I knew I could scale to a much higher income level within just a few years. That was my first business, a wedding photography studio. Choosing to focus on increasing my income from the very beginning, and increasing it every single year after that, was one of the biggest contributing factors when it came to creating a solid financial foundation for myself.
Much of the time we’re not taught to explore the idea of increasing our income, but it’s a really viable goal for most people to achieve. Whether that means asking for a raise, looking for another job, working on increasing your skill-set to become more valuable, scaling your business, starting a side hustle, or taking on some gig work in your free time, there are countless ways to increase your income. One of the only ways you’re going to make this happen though is if you set it as a goal for yourself and go for it. Don’t just sit back and wait for it to come to you, that almost never happens. Learn your worth, practice expressing the value you bring to the table, learn a new skill set, or start using a skillset you already have that you can use to make some extra money. This goal, single handedly, will help you so much, and set you on the right track financially.
Financial Goal #4: Set Yourself A Big Audacious Financial Goal
If you don’t have a financial goal in mind, and if you haven’t made a plan about the steps you’re taking each day to achieve that goal, then you’re absolutely going to find yourself feeling stagnant and lost. I truly believe that you always need to be working towards something, (it doesn’t always have to be financial) but you should always have a goal that you’re working towards and striving for. Financial goals are great because they often have direct visible returns that encourage you to keep going. So, if you don’t have a financial goal you’re working towards, then set one now, and make an actionable plan about how you’re going to achieve it. That goal can be anything, for example maybe you want to pay off some debt that’s hanging over your head, top up your emergency fund, start saving for your first home, or even just cut back on your eating out budget. Pick the level you’re comfortable with, then I recommend making it just a little bit more audacious. Plan out how you’re going to achieve that goal step by step, and then just get started. Once you’ve achieved it, pick a new one and get to work on that. Make it big, make it exciting, make it inspiring, and keep on working.
Financial Goal #5: Learn Something New About Managing Your Money
Most of us aren’t taught any form of personal finance management in any formal way, and until that system changes we are each in charge of increasing our own financial knowledge and improving our financial well being. There are so many great ways of learning more about managing your money, and you just need to choose one for the year and get on with it. That could mean choosing a great book or audiobook on the topic and listening to it on repeat or reading it and taking notes until you’ve learned something that sticks. You could commit to taking some finance seminars, or sign up for a course on personal finance management, book a meeting with your accountant to learn more about how to minimize your taxes, or subscribe to a finance podcast that you listen to consistently while you go for your after work run. There are so many resources out there that allow you to take control of your own financial education. If you only want to set one financial goal for yourself from this episode, it should be this one. Commit to learning something new about how to manage your finances. If you don’t know where to start, then I recommend starting here, subscribe to the channel, watch these videos, there are tonnes of videos and free lessons available to you on the How To Adult School platform and I’m constantly listening to your feedback and your questions and creating new content that answers these questions. I’m here to help.
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