What Are Financial Goals?
Setting clear, actionable money goals is one of the smartest things women can do to focus on the steps they need to take to achieve financial security and independence for the future. Meaningful goals provide direction and allow you to break down big plans into actionable strategies that will help bring about real change and provide purpose and motivation to as you work to improve your financial situation.
Why Financial Goals Are Important: Getting Clear On Where You Are Heading
Having clear financial goals with specific, measurable milestones along the way helps prioritise your money decisions, and stay accountable as you strive towards achieving your objectives. Whether you are saving for a house, planning your dream holiday, working to pay off debt, or looking to organise your money for long term financial security, setting financial goals provides the motivation to stay the course.
We love big, daring plans and for many women, the ultimate goal is to achieve financial independence, with all the options and choices that entails, so you can be in control of how you live your life. While the path to financial independence will be unique for every woman, it will normally require you gaining clarity on your financial affairs, spending less than you earn, and investing your money in assets that will yield an income you can draw on in the long term.
“She quietly expected great things to happen to her, and no doubt that’s one of the reasons why they did.” Zelda fitzgerald
What Financial Goals Should I Have?
Feeling inspired? Here are 10 actionable financial goals you can consider to take control of your money and work towards long-term financial security.
- Develop a positive money mindset: When it comes to setting and achieving your financial goals, having a positive money mindset is an essential foundation block to put in place. Attaining the right mindset involves being clear on what you want and understanding your “why” to stay motivated as you embark on your wealth creation journey. It also requires you to resolve any limiting money beliefs that may be holding you back from achieving your dreams. Write down your money goals – the bolder the better – to get motivated and stay accountable as you work towards success.
- Understand your numbers and cashflow: As a woman, being clear on your financial situation means empowerment. Getting on top of your numbers to establish your financial baseline will allow you to create an effective plan for the future. You can start by calculating your net worth: simply add up all of your assets and deducting your liabilities. Wherever you are now, this is helpful information to help set the scene for the steps you need to take next.
- Budget like you mean it: A budget is an essential component of your financial toolkit that gives you a clear picture of your income and expenditures right now. It also helps you make a plan for the future, so you prioritise your spending on the things you value in life. Create a budget if you don’t already have one, and check in on your progress regularly if you do. There are a range of options you can consider, so play around with a few different budgeting methods to find one that best suits you.
- Build an Emergency Fund: One of the most important things a woman can do for her financial wellbeing is to have money stashed away to deal with unforeseen life events. It is incredibly empowering to know that you can always leave a situation that no longer serves you – think annoying flatmates, tiresome colleagues or irritating boyfriends. Keeping some cash on hand that you can access easily means that you do not have to take on expensive debt or sell any investments to navigate through unexpected challenges.
- Increase and diversify your income: Consider where you are now in terms of income, and the steps you can take towards securing a promotion or pay rise to have more money coming in each month. The biggest mistake women make is to wait for a promotion or pay rise to b offered, rather than proactively starting the conversation with their employer. Research the market rate for the work you are doing currently and schedule a role and salary review with your boss. Additionally, you could explore options to expand your sources of income through a new side hustle. Are there skills you could leverage a few hours a week to help pay off a debt or boost savings? Increasing and diversifying your income will not only help generate a surplus that can be devoted to accelerate your wealth-building goals but it will also reduce your risks in an uncertain economic climate.
- Grow your savings: One of the best things you can do to grow your savings is to automate regular pay-day transfers to a dedicated high-interest savings account. Once you have built up your Emergency Fund, consider putting a portion of your monthly savings towards investments such as shares to build wealth. By keeping too much cash on the sidelines, you could miss out on years of returns that would benefit you in the long term. A common misconception is that you need vast pools of cash to get going, but investing in shares has become far more accessible with a host of online trading platforms tailored to those who are just getting started.
- Have a plan to pay off debt: It is hard to get ahead financially with a lot of debt weighing you down. Identify all of the money you owe to others and develop of a strategy to tackle your debts systematically. If you need the motivation of chalking up wins quickly, you could consider the “snowball” method of debt repayment, which prioritises paying off your balances from smallest to largest. Another popular option is the “avalanche” method, which will suit those who want to pay off balances from those that attract the highest interest through to the lowest. Regardless of the specific plan you choose, the most important thing is to stay focused and stay the course.
- Flex your investing muscles: The best time to start investing was yesterday. The next best time is now. The aim here is to build assets that will generate sufficient income to cover your expenses in the long term. The biggest risk for most women is playing it too safe and leaving money on the table by not getting their savings to work for them effectively. A strong portfolio of investments can not only provide income now, but also has the potential for capital growth in the future. Tap into the power of compounding interest by reinvesting the income you generate now to accelerate your wealth creation journey by growing your asset base faster.
- Set money aside for future you: Saving for retirement is an essential ingredient to long term financial wellbeing. Financially savvy women play an active role in managing their super by checking in regularly to review their statements and investment strategy, and making any adjustments as necessary. They also take advantage of the tax benefits associated with making voluntary contributions, where it makes sense for them to do so, to boost their retirement nest egg.
- Invest in your financial education: Managing your money is a skill that can be cultivated like any other. Investing in financial literacy is essential to making good decisions about money. Practical steps you can take to build your knowledge and confidence include creating a budget to better understand your financial situation, regularly reviewing and adjusting your financial plan and investment portfolio, learning about financial markets and different investment options by regularly dipping into money magazines, websites and books, signing up for an online course or connecting with a financial adviser to get tailored advice specific to your needs.
Final Thoughts
Working towards your financial goals may require you to evaluate your current relationship with money and make any necessary shifts to your mindset to achieve your objectives and create the life you desire. Gaining clarity on your current financial situation and identifying actionable strategies to build wealth are essential steps. As with all things in life, balance is key: staying realistic about what is achievable and sustainable will help keep you motivated, enjoy the journey as you take control of your finances, and set you up for long-term success.
This information is intended to be of a general nature only and should not be treated as specific investment advice on any particular matter. You should seek professional advice that takes into account your own personal circumstances before making any financial decisions.
