When trying to set financial goals, rather than solely relying on the ultimate goal, create short, medium and long term goals so that you can celebrate your small wins along the way. Setting one ultimate long term goal is often difficult to maintain because you can’t see how the spoils of your labour.
Immediate Goals (Short-Term) Start with immediate goals such as saving for that new phone or a vacation so that you can see your progress and celebrate your first win – it’s easier with short term goals if you can visualise what you need and then see yourself achieve it.
Emergency Fund Ensure that you always have enough in savings to fund 4-6 months of expenses in case you find yourself out of a job or your pet needs urgent medical care which is often paid for out of your pocket before it is eventually reimbursed (if you have pet insurance, which leads us to...)
Have the Basics Covered Make sure you have insurance – it makes it a heck of a lot easier to pay for emergency costs if you’re insured. Pet insurance is inexpensive yet is a total lifesaver when it comes to vet costs or forbid, urgent medical or surgical costs. Similarly, private health insurance can help fund doctors’ visits, x-ray and prescription costs as well as getting you a better level of healthcare. The rest of the insurances options are self-explanatory but if you manage to book them all with one provider, you’ll find you get even further discounted rates.
Medium Term A medium term debt could be to pay off debts like a credit card bill or student loan which can be paid in manageable installments. If your goal is a down payment on a house, then set yourself interim goals rather than the total figure, for example, achieving $15,000 at a time is easier and more mentally rewarding than struggling to reach the full $150,000.
Budget Backwards Work backwards from your goals to work out how much you need to save each pay to achieve it. Be realistic, don’t think you can save every cent of your pay because if you restrict yourself too much you’lll find you won’t be able to save for long and you’re more likely to give up. Aim to save say 10 or 20% of your pay and as you get more comfortable, increase it to the next level you can handle.
Visualise & Self-Motivate Create an inspiration board of your goals so that you can visualise yourself having achieved them. This can be as simple as a collage of images of a specific car if that’s your goal or as detailed as a visual diary of the life you want to live and the elements that make that up. For us, when we were house shopping, that included pictures of home interiors we loved with photos of us superimposed into the rooms like we were already living there. Quirky, silly but wholly effective. The clearer your vision, the more motivating it is and the easier it is to achieve.