How to nail your fi­nan­cial goals

South Waikato News - - Your Paper, Your Place - RICHARD MEAD­OWS

Our planet has com­pleted an­other lap around the nu­clear fire­ball at the cen­tre of the so­lar sys­tem. Tra­di­tion­ally we mark this oc­ca­sion by a) get­ting re­ally drunk, and b) com­mit­ting to im­prove our lives dur­ing the next ro­ta­tion.

Ev­ery­one man­ages to nail the get­ting re­ally drunk part, but not so much the self-im­prove­ment thing.

The prob­lem is that the goals we set are ter­ri­ble. We dream them up on the spur of the mo­ment, so it’s no sur­prise they quickly fall by the way­side. If you want to join the small mi­nor­ity of peo­ple who ac­tu­ally suc­ceed, block off a cou­ple of solid hours for the fol­low­ing ex­er­cise.

First, choose some­thing re­ally spe­cific. ‘I will save more money’ is a use­less goal. So is ‘I will spend less money on clothes’. The in­ten­tion is good, but they’re too wishy-washy. Try ‘I will save $100 out of ev­ery pay’, or ‘I will limit my cloth­ing spend­ing to $1000 this year’.

It’s im­por­tant to be bold, but re­al­is­tic. You need to work to­ward some­thing that gets you fired up, but not so far out of reach that you’ll fail mis­er­ably and lose mo­ti­va­tion.

The next thing re­quired is a spe­cific time­frame.

Let’s say you de­cide to save $5000 by the end of the year. You can then break down the goal into shorter tar­gets, like stash­ing $100 ev­ery week. If you’ve com­mit­ted to spend­ing less than $1000 on clothes, you would cal­cu­late a monthly bud­get of $83.

Once you’ve got a spe­cific goal with a spe­cific time­frame, write it down. This is su­per im­por­tant, be­cause things be­come real when you put them on pa­per. It sounds like some woo-woo mys­ti­cal non­sense, but it works. If pos­si­ble, do it ev­ery sin­gle day. You want to wire your brain to be con­stantly fo­cus­ing you in the right di­rec­tion, even sub­con­sciously.

At the very least, put your goal some­where you’ll see it con­stantly. Set your phone and com­puter back­ground to a pic­ture of the house, car, or hol­i­day you’re work­ing to­wards. Change your pass­word to some­thing that jolts your mem­ory ev­ery sin­gle time you type it in.

The other cru­cial step is to track your progress. If you’re try­ing to build your net worth (ev­ery­thing you own, mi­nus ev­ery­thing you owe) you can grab a copy of my net worth track­ing spread­sheet , or use a piece of pa­per stuck to the fridge with mag­nets. It doesn’t mat­ter how you do it - just do it.

Fi­nally, au­to­mate ev­ery­thing you can. Willpower is a lim­ited re­source, so you want to use as lit­tle as pos­si­ble. An ex­am­ple would be up­ping your Ki­wisaver con­tri­bu­tion rate, or set­ting up an au­to­matic trans­fer to an un­touch­able ac­count ev­ery pay­day.

This planet hur­tles around the sun at break­neck speed, but one year later, it’s right back where it started. Sadly, so are most of its in­hab­i­tants. Break free from the path of least re­sis­tance, and forge your own path in 2017.

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