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Hewison Insights

Kick off 2024 with these three goal setting tips

Pierce Hanlen
Partner & Wealth Adviser
8 Jan 2024

Financial success is a journey that begins with a clear vision and well-defined goals. Whether you’re aiming to build an emergency fund, pay off debt, or invest for the future, effective goal setting is the foundation of a sound financial plan. In this blog, we’ll explore three key tips to help you set and achieve your financial goals. 

Be Specific and Realistic

The first step in goal setting is to be specific about what you want to achieve. Vague goals like “save more money” or “pay off debt” lack clarity, making it challenging to create actionable plans. Instead, be specific about the amount you want to save or the debt you aim to eliminate. 

Additionally, ensure your goals are realistic. While it’s great to dream big, setting unattainable goals can lead to frustration and disappointment. Consider your current financial situation, income, and expenses when determining the feasibility of your goals.  

The Moneysmart website has some great tools that help with budgeting and understanding your current cashflows: https://moneysmart.gov.au/ 

Break down large goals into smaller objectives to make progress more achievable. For example, instead of setting a goal to “save $12,000,” break it down into smaller milestones such as saving $1,000 per month over the next year. This makes the goal more tangible and easier to track. 

Establish a Timeframe

Setting a timeframe for your financial goals provides a sense of urgency and helps you stay focused. Without a deadline, there’s the risk of procrastination and losing sight of your objectives. Consider whether your goal is short-term, medium-term, or long-term, and set a realistic timeframe accordingly. 

Short-term goals typically have a timeframe of one year or less, such as building an emergency fund. Medium-term goals may span one to five years, such as saving for a down payment on a house. Long-term goals, such as retirement planning, typically extend beyond five years. 

Having a timeframe not only gives your goals structure but also allows you to measure progress periodically. Regularly review and adjust your goals if necessary, adapting to changes in your financial situation or external factors. 

Prioritise and Create a Plan

Not all financial goals are created equal, and it’s essential to prioritise them.

Identify the most critical goals that align with your overarching financial objectives.

Prioritising goals helps you focus on what’s most important. 

Once you’ve established priorities, create a detailed plan outlining the steps you’ll take to achieve each goal. Break down the plan into actionable tasks and set milestones along the way. If your goal involves saving or investing, consider automating contributions to ensure consistency. 

Additionally, be prepared to adjust your plan as circumstances change. Life is dynamic, and unexpected events may necessitate modifications to your goals or the strategies you employ to achieve them.