Any which way you look at it, each and every one of us is a dreamer. Whether you like to walk the tightrope that is risk, or prefer solid ground with your finances, we’re all motivated by our wildest dreams.
Despite our love of dreaming, fewer Australians are saving money and achieving our dreams is starting to become a stress point. A considerable 36 percent of Australians find that dealing with money is stressful and overwhelming, says ASIC. Similarly, 30 percent of Australian renters report being unable to save money.
Making your dreams a reality requires a strong financial plan – and that plan starts with knowing exactly why you’re doing it all.
You need to choose a timeframe and a measurable target – and this needs to be achievable.
Setting goals, both long-term and short, gives you something to work towards and a way to measure your success. When you’re trying to save, consider the various obstacles in your way, and goals you can set to help with overcoming those.
For example, if paying off a mortgage may be hindering your ability to save, a natural goal will be to complete repayments – but to effectively structure your goals you need a little more detail than that.
In the case of a mortgage, repayment is all of these things – specific to the value of the loan, measurable by the amount paid so far, progressed by your actions (payments) and, respective to your income and chosen time frame, realistic. Many banks and financial service providers will include calculators on their websites to help you estimate how long it may take you to reasonably settle your debt.
Finding your “why” is about looking deeper into what you want out of life.
While goals are the bread and butter of financial plans, it pays to know the wheat that bread is made from. Maintaining your determination and staying on track can be difficult, so knowing the ultimate reason why you’re working so hard is vital.
Finding your “why” is about looking deeper into what you want out of life. If you’ve set a goal to pay off your mortgage, consider why you have the mortgage at all. Is home ownership that important to you? It may be. Or, you may realise your goal is less to own a home, and more to enjoy the financial stability associated with home ownership. In which case, applying the SMART strategy would likely yield very different results and you may even find renting is not as much an obstacle as you thought.
When you assess the true reasons you work to save money, it can open your eyes to other potential ways to achieve those goals.
Introspection can be easier talked about than done. Pushing yourself to delve into the core of your financial motivations is a big ask. At Invest Blue, we want to help you find your “why”.
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