If you’ve ever set a goal for yourself, you know that it’s a great way to stay motivated towards achieving something. Similarly, setting a financial goal like paying off your loan or saving for retirement, could increase the chances of achieving that goal more quickly.
However, you need to ensure that your goals can actually be achieved. For example, it’s unrealistic to aim to buy a property by the end of the year if you still have a significant amount of debt to pay off.
To do this, you need to think about which goals you want to achieve and how you want to get there, which can be a difficult process. We’ve outlined a few things you might need to consider to set yourself up for success!
1. Track your spending
To start saving, you’re probably going to have to set a budget for yourself. But before you do that, you need to first keep track of your spending habits by recording every item you spend on.
Now, looking at your spending patterns. Are there recurring payments, like monthly subscriptions, that you pay but hardly use such as Netflix or Classpass? Are you spending more dining out when you’ve just bought RM400 worth of groceries at home?
Once you do this, you can effectively identify where you can cut down and how much you can reasonably save.
2. Pay off your debt
Before you set other financial goals you should aim to pay off any debt you might have. This could be anything ranging from student loans to credit card debt.
If you have a large amount to pay off, you may not be able to do it all at once, but you can chip away at it bit by bit. Set a reasonable amount that you can pay off every month – this shouldn’t break your bank account, but should require you to budget a little.
Remember that not all debt is equal, and you should always aim to pay off high-interest debt first before tackling the others.
3. Start with simple/small goals
Saving for a long-term purposes can be difficult if you’re only just starting to save. You might stress yourself too much by aiming to save for a big figure that might seem impossible to achieve!
Instead, give yourself a confidence boost by starting with simple, short-term goals. Save for a vacation, a concert ticket or that new phone. As you tick these off, you can start tackling larger goals – until you finally feel comfortable enough to save for your long-term financial goal!
You can also break your long-term or ‘big’ financial goals into smaller, more achievable ones. For example, if you want to buy a house, start with slowly putting aside the amount you need for the deposit before you move onto the larger costs.
4. Prioritise your goals
While it’s great to set financial goals, you need to also make sure to rank them according to what’s most important. Think about the goals that you want to achieve first. Is saving to buy property more important than buying yourself a new car, or is it the other way around?
Ranking your financial goals will help you with deciding on what your main or most pressing goals are, and from there, you’ll be able to plan your savings more efficiently.
5. Set deadlines for your goals
To achieve your goals, you need to make sure you’ve allocated a time limit to it. If you have a goal that isn’t time-specific, you’re not giving yourself a clear picture of when you need to get there.
For example, telling yourself that you’re aiming to ‘save money’ doesn’t tell you how much you’re planning to save and when your savings deadline is. This will make you less likely to work towards achieving your goal.
Instead, set a specific goal, like aiming to save RM30K over a year. From there, you can break it down into saving RM2,500 a month, and RM625 a week. Once you do this, you’ll be able to track your progress until you reach your goal!
While it’s tempting to keep saving for smaller goals, like holidays or concerts, you should always aim to build your personal savings.
The best way to do this is to save in an asset that will grow your savings, like gold. The value of gold has been proven to increase over time, so you’ll always have a store of wealth in the precious metal.
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