Improve your self-esteem and your finances all at the same time… Why goal setting is so powerful
Turning something you want in life into a goal is a really great way to make it happen. Turn that into a financial goal and that is gold! When you set goals, you are making a decision to act in order to get what you want. Goals give you direction, they keep you focused and motivated, and increase your chances of achieving things.
When you have a financial outcome at the end of your goal setting it improves how you think and feel about yourself, your position in life and your life choices.
What’s important about the goals you set is that they need to mean something to you. When you have a positive financial outcome, the uplift from these goals can be life changing. The self-esteem comes from getting the most benefit out of achieving your goals and improving your overall position in life. It is the feel good factor.
We live with so much negative self-talk. Especially if you have grown up in a family where your parents were not very good with money, and the family struggled. Much of self-esteem can emanate from negative thoughts in your childhood about ‘going without’, or being poor.
How to begin
To set a goal you need to know what it is that you want. This is a huge stumbling block for a lot of people – but it’s an important one to work through. If you don’t know what you want to achieve you aren’t going to get it, which isn’t great for your happiness. Some tips for helping you to work out what you want include:
- Work out what is really important to you. Remember that goals are flexible and can change with a review at any time. What is important to you today, might not be so important in a few years’ time. For example, if you feel your mortgage is getting on top of you and you don’t feel like you are getting ahead, put mortgage reduction down as a specific goal.
- Remember to keep finances for the things you enjoy. There is a difference between self-gratification and delayed gratification. When we go without something today, in order to achieve something tomorrow, it actually builds better self-esteem and longer term attainment of goals. But don’t cut sport and essential recreation out of your budget. Daily exercise and being with friends is one of the most important aspects of happiness. So work out what you enjoy and what is essential and what can be delayed. This is one of the most key factors in getting started.
- Don’t get caught up in the Big Things. Your goals must be attainable. If you overwhelm yourself with unattainable goals, you will do more damage than good. So get some help with benchmarking your goals.
- Think about what you don’t want. Write down a list of ten things you don’t want, then turn it upside down. Now rewrite the list as if you were attaining them as goals, i.e. I don’t want to live in this house forever. Then turn upgrading your home into a goal.
I attribute the absolute success stories at Solid Group to setting goals. I cannot tell you how many people have turned their lives around before my very eyes after setting goals. Take the time to work out what makes you happy, including friendships and relationships you need in your life, and how to support family. Take work/study and career into account. Safeguard your hobbies and interests and reconsider your attitude about spending and saving.
I say to all my clients, if you give yourself 2 – 3 years of hard saving and delayed gratification it can set you up for life. Consider this in your plan. Goals can be made about lots of different areas of your life. Think about:
The process of goal setting
When you have an idea about what it is that you do want, there are three simple steps you need to take to set a goal.
1. Define your financial goals.
There are two important parts to defining a goal. It must be clear and specific and be measureable at some end point, and they should be realistic. Be challenged, but don’t set yourself up for a fall.
2. Set sub-goals.
Break up your goals into sub-goals. In financial planning this is often the KEY to success. It is important to stay motivated, particularly when your larger goals take a long time to materialise. Sub-goals help you recognise and celebrate your achievements. For example, you may have a mortgage of $256,000 and a credit card debt of $5,500. It would be reasonable that the credit card debt will be cleared first. So when you achieve that goal, really celebrate it!
3. Work through a plan of action. Having a tangible plan of action helps you to stay focused:
Write down your goals and your sub goals. I used to write them on the bathroom mirror (a permanent marker stays on a mirror and can be easily removed), or put them on the fridge or even the work-station at work. Having them close by will help you.
Give yourself realistic timeframes and deadlines.
4. Make a time to meet with Lynne or Nick to start your financial goals if you are having trouble. Having an outsider’s point of view can often help take away some of the confusion and uncertainty.
Call Olivia Scott on 03 9500 8000 to book a free consultation with Lynne or Nick