It is the start of a new financial year, and the perfect opportunity to turn over a new leaf with your money or inject some fresh momentum into your new year’s goals.
But let me ask you this: when was the last time you paused for a moment to picture precisely what it is that you are working so hard to create?
It is a simple but important step that most people fail to take into consideration, and one which can make a big impact to increasing your chances of success. That is to ask yourself one simple question : “what do I ultimately want?”.
By not keeping this question front of mind, not only do you wind up with a scattergun approach to your finances, you also risk achieving the exact opposite of what is really important to you!
And so, before you get started with putting together a new budget or researching your investments, here are a few simple steps that can help you increase your chances of hitting that bullseye!
Step 1: Dare to Dream
Research has shown that of those who are financially successful, 4 in 5 of them dream about their future on a regular basis.
You can call it daydreaming.
You can call it visualisation.
Whatever name you want to put to it, one thing is certain: unless you have a clear idea of what it is you are aiming for, with the exception of pure luck, odds are you won’t get there. It is much like getting in a car with no destination in mind!
So before we can start to make your money work for you and start assembling the building blocks towards the life you desire, it is important that you first spend some time thinking about what it is that you want to create.
What is it you are working so hard for? Where do you want to live? How do you want to spend your time? How many hours or days each week do you want to work? When do you want to create this by?
Spend some time every day this week thinking about that – and if you want to dial things up a notch you can even create a vision board or change your computer screensaver.
The more often you think about and focus on what you want, and the clearer the mental image of what you want to create, the more likely you are to spot opportunities that will help you to get there!
Step 2: Set some lifestyle goals
Once you have an idea of what you want your life to look like, it is time to set some lifestyle goals. What are some short-term (up to twelve months), medium-term (two to six years) and long-term (seven-plus years) lifestyle goals you are committed to right now?
Step 3: Break it down
It is now time to convert each lifestyle goal into a SMART financial goal (Specific, Measurable, Achievable, Relevant, Time-bound).
For example: My short-term goal is to stop worrying about paying the bills. In order to make this possible, I need to save up $1,000 in twelve months. My long-term goal is to be mortgage free in ten years. In order to do this, I need to pay an extra $150,000 over the next ten years.
Now that you have specific amounts and timeframes in mind, take it a step further and break each goal down further into weekly, fortnightly or monthly amounts (depending on how often you get paid). This way, you have a clear target to aim for with each pay cheque and can start to work these goals into your cashflow.
For example: If you wish to save up $1,000 in twelve months, that means making room in your cash flow so you can set aside nineteen dollars each week. If you wish to pay $150,000 off your mortgage in ten years, that means paying an extra $288 each week into your home loan.
But I don’t know what I want!
If you find yourself struggling to find the answer, or are even afraid to let your mind imagine what you deem to be the impossible, don’t worry, you are not alone.
In fact, for many this can be a major stumbling block, which is probably why so many skip this important step! So is it any wonder that we struggle to create the life we desire, when we can’t even describe what that looks like?
If you need a helping hand figuring out your why and working through your fears (as well as the rest of your finances), check out our signature Making Cents of Money program. It is fun, practical, and completely self paced.
If you would like a helping hand with your money but aren’t quite ready to commit to a course, make sure you get a copy of my new book, Wonder Woman’s Guide to Money – out now and available on Kindle and paperback.
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The information provided by Women with Cents is general in nature. It doesn’t take into account your objectives, personal financial situation or needs. Think of it as educational material in which to help you make more-informed decisions. We recommend you obtain financial, tax and credit advice specific to your situation before making any investments or financial decisions.
Sova Financial Pty Ltd Trading as Women with Cents. ABN 71 163 435 836 | Sova Financial is an authorised Credit Representative Number 443432 of Finsure Finance & Insurance Pty Ltd, ACL 384704, ABN 72 068 153 926| Sova Financial is a corporate authorised representative no 468977 of Shartru Wealth Management, AFSL 422409, ABN 46 158 536 871