How to construct good financial goals
The modern day struggle that seems to have passed on from generation to generation is the inability to make good sound financial decisions, this is large because financial literacy has always been a habit of a certain class of people and even though majority of people are not an elite class of monetary holders there has never been an interest of society to formulate ways in which all classes can understand and make sound financial decisions.
In order to make good financial goals that are realistic and attainable we need to develop habits that support good financial reasoning, a reasoning that gas wealth as a goal and not just riches for the day. Our financial liberation lies in how we think of wealth, how we approach wealth and most importantly not making emotional decisions about money, so to break it down know that this article dives deeper into the realities of our finances and critically looks at the most suitable thinking tools that will ensure that everyone can live a happy abundant life with financial freedom as the cornerstone of abundance and prosperity.
- Analyse your needs
People are different, we want different things and the same thing that could make your neighbour happy is not necessarily what could make you happy. When looking into your needs look at what you need to make your life simpler and more joyful and look at this from a financial perspective. If for example you would like to travel and feel that this is the one thing that could make you happier, then think of traveling from a financial perspective, ask yourself what are the costs related to you traveling once in every month or once in every three months, because putting time to a goal brings you closer to realizing it. Once you know what you want to put it in your financial journal, where you edit costs, like if travelling with the fly emirates is more expensive that flying with Boeing you make an edit, to reduce costs, till you find the most affordable package for your travels.
Another example of analysing your need is finding things that could make your life easier, believe me, all human beings have this in them, we want things that make it simpler to live, we want a coffee machine, even though we have a teapot and a kettle. You must look deeper into these desires because the chances of making emotional decisions here are also very high, for example you find that you want a new cellphone an iphone7 when you already own a healthy iphone6, this is categorized as an emotional decision simply because it is neither a need that addresses a gap or a need that will improve your life significantly, I know many will argue that the new features are worth the upgrade, but remember we are discussing making sound financial goal by analyzing your needs. When looking at what you need be certain that you are not making an emotional decision, a decision that is related to keeping up with the joneses but one that is looking at your life and what makes you happy.
- Think assets instead of possessions
Financial masters have learned that wealth comes with having assets that will work for you, this can be the most basic of assets, like a computer. A computer has many functions that make life easier, and it can also generate an income, so whether even though it depreciates its function serves its worth, looking at having possessions make you very prone to collecting things that will fill up your space and complicate your life, remember you want to have things that make your life easier not clutter. You do not want to have just any asset you want one that will make your life a lot more simple and make money. The best asset to own without a doubt is, land and building, this asset appreciates, meaning it grows in value and can generate an income without you having to work hard, and has a number of ways of generating an income, so when you look at assets find out If they appreciate and how much effort do you need to put into them in order to make some money from them.
- Let your money do the walking
Financial goals should be those that involve you doing hard work today, so that you don’t do hard work tomorrow, the best way to do this is by generating money today so that you have money to invest tomorrow, personally I have found that investing money in a bank takes forever for it grow and give me the financial freedom I need, that is why is would rather invest in an asset or a business, this is completely up to you. If you have no problem with waiting for an income to grow at 6% per annum then invest in a bank. But if you want to speed up the time it takes for you to have the life you desire.
There are many ways of growing your dollar; you can now put your dollar into a cryptocurrency which has a deflation value instead of an inflation value. So really there are no limits to what can be done, depending on your goal, invest in something that will suit your financial capabilities and needs.
- Adjust your financial habits
Your financial lifestyle should suit your financial goals, this is important, because many people have goals, to buy a house by the end of the year, they open a savings account to meet this goal, then find in-between the year then they find themselves needing the money to patch up on this expense and that debt etc. this is when the goal does not meet the lifestyle. Truth is, there is a price to be paid for everything, when you want to buy a house by the end of the year you need to change you spending habits, and honestly need to adjust your appetite for going out on Saturdays, buying kids toys, transport and everything. You have to set the goal along with the lifestyle and be mentally prepared for having less and spending less throughout the year.
- Create wealth not riches
It should be known that there is a difference between being rich and being wealthy, rich people have enough to provide for themselves and all that is related to them, wealthy people create opportunities for others to generate income from their work, this ensures that there is a continuous flow of money between them and everyone they know. So when looking at setting a goal to think deeply on whether that goal has longevity or not. Will there be an opportunity for you to rebuild if anything happens to your current goal? And who gets an opportunity from your goal, yes I said look for something that will make you happy and benefit you, but you should extend that into making sure that the benefit can last and the happiness is shared.