THE ART OF FINANCIAL GOAL SETTING
Commonwealth Bank’s NATHALIE SPENCER shares practical advice to get the most out of your money
The festive season sure knows how to drain out the bank account! But with the new year here, there’s no doubt we’re all aiming to kick ourselves into gear and start crafting our financial resolutions.
Senior manager of behavioural economics at Commbank Nathalie Spencer explains how to create, believe and achieve your money goals...
Where to start
“When it comes to goal setting for your finances, it’s all about having a clear understanding of what you’re trying to achieve,” says Nathalie. “A financial goal should be meaningful to you
– try asking yourself, ‘Why is it important for me? What value will this bring?’”
Most people might think these goals revolve around saving for something – like a home or holiday – but they can be much more varied than that.
“For example, if you’ve never really drilled down into your income and expenses, you might set a financial goal to set a budget,” says Nathalie. “If you already have a budget, your financial goal might be to set a regular monthly check-in to review your budget against your actual spending. If you have several financial products that you’ve collected over the years – like credit cards, insurances, savings accounts, for example – you might have a financial goal to audit your products and services to ensure they’re all still appropriate and necessary.”
Make it stick
It’s important to set yourself realistic goals. There’s nothing worse than setting out to achieve something that may not be within your reach, to then fail and demotivate you from setting any more goals in the future.
“It’s important that the goal is both meaningful to you and it’s attainable – that is, you believe you can achieve it,” says Nathalie.
“It can help to set your objectives, and then write your steps down to see how you’re going to get there. For instance, if you want to save $2500 by the end of the year, that means approximately $208 a month, which is approximately $48 per week. Breaking the goal down into smaller steps will give you a better idea if the goal is within your reach.”
While financial goals should be challenging, they shouldn’t cause unnecessary financial stress or strain.
“I often say goals should be at a ‘Goldilocks’ level,” says Nathalie. “Not so easy that they lack impact, but not so hard that they are unachievable. We have numerous features available in the Commbank app that can help keep you on track with your goals. Some of these include: Transaction Notifications that let you see in real time your debit and credit card spending; Spend Tracker, to categorise your spending; and Lock, Block and Limit giving you extra control of your credit card at your fingertips.”
Be patient
If you don’t reach a goal by the desired timeframe, don’t be discouraged, but do try to understand what held you back.
“Re-evaluate what is achievable, revise your goal, and continue at a pace that is sustainable for your circumstances,” says Nathalie.