Level 2: My Financial Objectives

Level 2: Set Financial Goals

Step 2: Set Financial GoalsThis post describes how I implemented step 2 of the mission to Financial Independence. To read more about how you can set your own financial goals, please refer to step 2: Set Financial Goals

After making a commitment to achieve Financial Independence, the next level up is setting financial objectives. I wanted to set clear financial objectives that, although I was aware might still change later on in this mission when I dive a little deeper into different financial topics, would be my main anchors and most important outcomes of  my journey.

At the start of my own mission to Financial Independence I identified to following objectives I wanted to achieve:

  • Set aside money on a monthly basis. 

This is an important one for me as I am aware that I should be setting aside money for my future. I want to make sure that I add to my monthly savings regularly to have separate savings to rely on when I become Financially Independent.

Added to that I also wanted to set aside a fixed amount each month for various short term goals so that when the time comes to make a purchase I not only have money set aside but also know how much I can spend on it. This includes a yearly fund for (Christmas) presents, flights (I don’t live in my home country but luckily living in Europe it is easy for me to go back and see my friends and family from home relatively easily, but I do of course need money to buy flights!) and medical expenses.

Using the SMART goal setting method (see infographic further up), this would translate into: “Build up a 6 months freedom fund by January 2023 in case I end up without an income to cover my expenses during half a year, by setting aside €150 per month.” And the second goal: “Set aside €100 per month for specific targets including flights, presents and medical expenses to be able to use whenever needed.”

* If you want to find out more about setting financial goals using the SMART technique, put your email below to get a free worksheet you can instantly print and use!*

  • Plan how to become debt free

I have a (relatively small) student loan as well as a mortgage and whilst there are people who say you should pay off all debt as soon as possible, others are more cautious, bringing in arguments about interest rates, rate of return and inflation. All things that I couldn’t put together into a big picture or plan to know whether or not it was wise to pay of my debt as quickly as possible or not, as I didn’t know what these things meant nor how to use them to make a decision. As part of my financial journey I wanted to be able to decide if and how to pay off my debt as soon as possible based on knowledge I’d hoped to gather during this journey.

The SMART goal was therefore: “Know by May whether I should accelerate my debt payments, by understanding how inflation, interest rates and returns affect this decision. If I decide to pay down my debt aggressively, have a set plan to put into place by June.” 

  • Understand my pension provision

Admittedly I am still many years away from retiring (I’m in my 30s), but I didn’t feel comfortable not knowing anything about my pension and what that would look like. There are many stories going around that by the time my generation retires, our (state) pensions will no longer exist as they will have become too expensive to sustain. Not a great prospect so I decided I had to become proactive and learn what my own exact pension situation currently looks like and whether I needed to take steps to build in an extra safety net.

In SMART terms this would be: “By July I want to understand my own pension provisions projections I am entitled to and have a set plan to put into place starting that month if I decide to increase my pension contributions via a private pension plan.”

  • Learn about investing 

I never learned anything about investing and had no idea what shares and portfolios were when I set out on this mission. When people said they were investing part of me could only think that all those people were just bound to lose all their money soon, yet another part of me kept wondering why so many people were investing. Surely something must be attracting them into the market? Was there after all a way to make money on the stock market without a guaranteed financial disaster looming over? I wanted to learn about investing so that I could make an informed decision as to whether or not I wanted to start putting in some money too.

The SMART version was: “Understand what investing is and how it might apply to me personally. Decide whether to invest or not by August and have a plan to put into place by September if I decide to start investing.”

These were my four main objectives before I set out on my 100 steps mission. As you might understand I added in a lot of other objectives along the way and also modified some of the above, but knowing what I wanted to get out of this journey greatly helped me stay focussed and motivated. To read up more about setting financial goals, read the broken down explanation of step 2.

Grab your free worksheet to start setting your own Financial Goals here by leaving your email address below.

Let me know about your own goals below or on your favourite social media!

Step 100: Stick to Your Mission

Step 100 of the 100 Steps Mission to Financial Independence: Stick to your Mission
Step 100: Stick to your Mission

This is it, you’ve come to the end of the 100 steps mission, you’ve set important new goals, maybe already completed a few along the way, you’ve implemented new habits, have learned a wealth of information on finances (excuse the pun) and most importantly you have started your mission to financial independence, getting closer with each step that you take.

But despite getting to the end of these 100 steps, you aren’t there yet. Financial Independence is not achieved by reading about money, it is achieved by taking action daily and sticking to it. Remember the examples of people who give up smoking or start a new diet and how often they fail and give up their resolutions alltogether? You’ve come to the second most important point on your mission. The single most important one was when you embarked on this mission and decided to take action and change your situation. Your next most important moment is now and it is your determination to continue with your mission, stick to your habits, keep learning and persist progressing towards financial independence.

With all that you have learned til now and everything you’ve started, now is the time to make a new commitment to keep financial independence as one of your top priorities for tomorrow, next week, the next month, next year, the next 5 years and indeed the rest of your life. Don’t let all you’ve learned and done go to waste. Don’t allow for your hard work to have all been in vain. Keep tracking your monthly spending, making a new budget, noting down your networth, reviewing your investment strategy and tracking your progress towards your various financial goals whenever you can. Continue reading “Step 100: Stick to Your Mission”

Step 87: Play the What If.. game

Step 87 of the 100 steps mission to financial independence: Play the What If... Game
Step 87: Play the What If… Game

Being prepared for adverse financial situations is an important step to take on your way to financial freedom. Without wanting to sound demotivating (or even morbid), the “what if..” game forces you to think of unwanted but possible situations that might happen and that would set you back on your journey to financial freedom and in some cases would have far bigger consequences than just the financial effects.

We’ve already established the importance of an emergency fund for those times you have a big unexpected one-off expense you need to pay and you should also be well on your way to getting together a 3-6 month living fund in case you (or your partner) lose your main source of income and need to make ends meet until you find another job or income.

Whereas the emergency and living funds prepare you to financially deal with the consequences of a financial setback quickly and efficiently, the “what if…” game prepares you psychologically for any behavioural changes you might need to make to adjust to smaller or bigger changes in your life that might require you to adapt on a longer term.

So let’s get playing… Continue reading “Step 87: Play the What If.. game”

Step 81: Consider Hiring a Professional

Step 81 of the 100 steps to financial independence: Consider Hiring a Professional
Step 81: Consider Hiring a Professional

Despite all the information you read, the experience you have and maybe the relatively simple financial situation you feel you are in, there might be times when it is worth getting the help of a professional when it comes to your personal finances.


Finding the right person to help you with your specific situation can help you in several ways:

  • They can save you money
  • They can save you time and energy
  • They can recommend better solutions for your situation

The first advantage – save you money – is a complicated one as apart from saving you money, when you hire a professional they will also cost you money. You’ll need to pay them for their work, time and expertise at the end of the day. So before you run out to find a certified financial planner or fiduciary, it is worth considering how much they would be able to save you, how much they’d cost you and what the net difference is between the two.

Apart from saving you money, a professional financial adviser can often also save you time and mental energy. If your financial situation is relatively complex or if you have a lot of paperwork to complete, for example for your tax returns, hiring the help of a financial planner can save you considerable amounts of time and energy, meaning you can spend that on something far more enjoyable!  Continue reading “Step 81: Consider Hiring a Professional”

Step 79: The 4% Rule

Ste 79 of the 100 steps mission to financial independence: The 4% Rule
Step 79: The 4% Rule

“This whole financial independence story might sound nice and dandy, but how will I ever get there?” I hear you think. “How much money do I need to retire?” and most importantly: “What can I do NOW to make sure I get (and stay) on track to reaching my financial goals?”. Well, I am glad you asked as it is about time that we start looking at putting together a lifetime plan for your financial journey that will make sure you reach your financial dreams and that will give you the motivation and blueprint towards achieving those goals.

In order to get that plan together we will first discuss the 4% rule, a hugely popular and helpful guideline to planning for retirement.

The Trinity Study

In the late 90s and then again in 2009, three professors from Trinity University conducted a now famous study on how different withdrawal percentages affected various retirement portfolios over a 30 year period.

What they calculated in particular was how the portfolios stood up against various withdrawal rates, i.e. whether the portfolios would stand the test of time and outlive the withdrawals. If a withdrawal rate succeeded it meant there was still money left over in the portfolio after the time period of withdrawals ended. Their studies included: Continue reading “Step 79: The 4% Rule”

Step 78: Set your Financial Independence Goal

Step 78 of the 100 steps mission to financial independence: Set your Financial Independence Goal
Step 78: Set your Financial Independence Goal

All along this mission we have been talking about financial independence and I’ve identified and described steps that will help you to get closer to your financial independence. But what exactly is Financial Independence to you? It is important to have a goal and to know what you are working towards to in order to once actually achieve that goal. Now that we are nearing the last part of our 100 steps and now that you know a lot more about finance and money management, you’ll want to dedicate some time to determine your long-term goal so you can kick things into next gear and align your mission with your ultimate financial goal.

Four goals of financial independence

Below are four common goals that people have for their financial independence. They are presented in a logical progression to go through and whereas getting to stage 1 should be easy if you follow this mission plan and even getting beyond that first step into the 2nd step might not be too difficult if you keep up well with the plan, getting into that 3rd stage depends completely on whether you push yourself beyond your current beliefs, habits and limitations and of course whether you ultimately really want to get there. Remember also that whilst the last stage of financial freedom might seem almost unattainable for most of us, it is not completely impossible. People like you and me have done it before and will do it again. But hey I admit that requires some SERIOUS hard work and dedication.

Let’s discuss the four common financial independence goals you might identify with and see which one corresponds most closely to your financial goal at the moment. Continue reading “Step 78: Set your Financial Independence Goal”

Step 76: Translate Expenses into Time-Costs

Step 76 of the 100 steps mission to financial independence: Translate expenses into Time-Costs
Step 76: Translate expenses into Time-Costs

Every time you spend money you spend time. It’s not the good old “time = money” adage you should worry about, but the exact opposite: “money = time”, which although might seem to mean the same, is much more pertinent and important to remember than the first one. If you are like most people, the bulk of the money you have to spend each month comes from your job in the form of income. Each month you start afresh with a new paycheck of money coming in on one hand and also new bills to pay on the other.

It’s a logical sequence of how things work: You have bills to pay therefore you need a job so you can generate an income to pay these bills. Your job provides you with money so you can pay your bills (and then spend some more). The next month it starts all over again when there are new bills to pay and another month to work to pay these bills.

You are working for an income and regardless of your profession, your job is designed to trade time for money. You put your skills and expertise to use and in exchange your company gives you a salary. Change from a full-time job to a part-time one and you’ll likely get less money (less time = less money) and vice versa. Continue reading “Step 76: Translate Expenses into Time-Costs”

Step 75: Budget and Spend on YOU

Step 75 of the 100 steps mission to financial independence: Budget and spend on YOU
Step 75: Budget and spend on YOU

Unlike the rest of the 100 steps mission, this step advocates a little spending and whilst some of the content might sound as if it takes you away from your ultimate goal of a secure financial future, it is indeed a very important step to financial independence. The habit of budgeting to spend on you continuously reminds you of what is important and why you are going through the hassle of all the other steps.

It can be very tempting once you get really into personal finance and see the advantages of building up savings and investing to try to cut down all of your expenses as much as possible, to skimp and save and live a lifestyle of extreme frugality. And although there is nothing wrong with being frugal and some people can indeed get real satisfaction out of this, some take it to a level that is a little too extreme to actually make them happy. Many of them end up giving up on their journey to financial independence as it is asking too much of them, or they become unhappy and disgruntled as they feel they can no longer enjoy life and instead are only thinking about “tomorrow”, “a secure financial future” and “being cheap”.

Of course you have embarked on this mission for your own reasons, but I truly hope that your ultimate goal is to achieve happiness and not actually having an X amount of money in the bank. There is of course nothing wrong with wanting to have that money in the bank, but never lose sight of your why: Why do you want that money? Wanting just for wanting’s sake is foolish and will not make you happy. But if you know why you want that money (to become a stay-at-home-parent to spend more time with your family, to travel, to live a more fulfilling life by volunteering or being able to set up your own company… ), whatever it is, you need to keep just that in mind. As that is what will bring you happiness, the money in itself won’t, it will only allow you to achieve your goals faster.

To make sure you keep happiness and enjoying life at the centre of our mission, you are going to do some spending on yourself! You need to keep this journey it fun, keep your motivation up, see short-term results and just simply reward yourself now and again. Budgeting something for you is a great way to achieve all of the above. You need to spend a little extra on yourself now and again, ideally on something you otherwise wouldn’t do. It should be something extra, maybe a little luxury.

Some examples of how you can spend a little extra on yourself:

  • Luxury bath or shower product or make-up;
  • A new magazine or book;
  • A new accessory for a gadget;
  • An item of clothing that is extra and maybe not something you need and outside of your clothing budget.
  • A new plant or some flowers.
  • A massage or beauty treatment

It can be anything that gives you some special joy and happiness and that feels like splurging a little. You’re looking for something that you would like to buy for yourself but that you don’t normally do. It should take you maybe two or three months to get that money together, so you really feel you’ve earned it and it built up anticipation of getting the money together so you start thinking what you can buy with it. It should be something relatively common and easy to acquire, it is not a savings goal in itself, it is just a kitty with some money you set aside each month so you can buy something with it every 2 – 3 months. We’re not talking about a new iPhone here as that is a bigger savings goal in itself, it should be something smaller that gives you the feeling of a reward.

Whatever you buy, it should be something for YOU. Maybe buying your daughter a new jumper makes you happy, but that isn’t YOU, that’s your daughter. Buying your partner an extra present for their birthday is not YOU.

Step 75 – Budget and Spend on YOU – in detail

  • Decide what would be the ideal reward for you that would give you pleasure and a sense of achievement every time you were able to use it or purchase it. Ideally it would be:
    • something that is not a long-term saving goal, as the whole point here is that you get more regular rewards and not a long term reward.
    • something that you can set relatively small amounts of money aside for each month (say $5 – $20) and that after 2 or 3 months gives you enough to buy the item.
  • Create a separate kitty or a nice jewelery box where you put the money in if in cash. Alternatively assign the money to this category in your new budget each month.
  • As soon as you have enough to buy something with it: go out and buy it! The whole point here is that you get to see the advantages of setting money aside, but without having to wait 20 years in order to collect your prize.

Don’t feel guilty for spending this money. Life is to be lived and the small pleasures of life form an important part in this. So don’t NOT spend this money just because it is an extra or luxury category. You have worked hard enough to earn save this money and are allowed something extra from all of this as well!

Read more about my 100 steps mission to financial independence or simply decide to take control today and join us on our step-by-step quest on how to make your finances work for you, starting with step 1.

Step 69: Teach your Children about Finances

Step 69 of the 100 steps mission to financial independence: Teach your Children about Finances
Step 69: Teach your Children about Finances

In the previous step we looked at how setting aside even small amounts of money can give your (grand)child(ren) a very nice mini-fortune by the time they turn 18 if invested well. Of course you (or they) might be unlucky and the market might just hit a bad year when they turn 18 (or 21 or 25) but who’s to stop you from waiting another year or 2 until the market has recovered again before you hand over the investment account?

But then what’s to stop them from spending all of the money – the money that you set aside deligently for years, making the most of that compounding interest – in one weekend, on one holiday or on a (in your view) stupid purchase?

Of course the problem with this is that you might be skimping and saving to get this money together, but once you give it to your child, remember it is their money. Whether they splurge on a luxury vacation, use it to fund their college or as a first downpayment for their house is ultimately their own choice..

That said, as a parent or grandparent you have a responsibility in educating your children about finances. Funnily enough we are totally cool and understanding of having to teach our children social skills in order to make friends and to respect others, help them with any maths or French homework and teach them basic personal care skills like cooking and the importance of having showers, but the financial education is often neglected. Whether people don’t want to bother innocent children with grown up matters, think that school will teach them this stuff or just generally feel uncomfortable about discussing money with their children I don’t know, but teaching children about money is an important role any parent has. And if you do your job well and teach them the real value of money, your children might be less likely to spend all of that money you gift them when they turn 18 in one go.

So let’s look at some ideas on how to teach children the real value of money from an early age on:

  • On a day out, or weekend away or even a holiday, give children a mini budget for themselves or tell them that as a family you have a total budget of say $40 that together you need to decide on how to spend. They get to vote (or decide) whether to have a simple sandwich and some money for an ice cream and a small souvenir or whether to go for that slightly fancier meal but not have any extra money for an ice cream nor souvenir. This helps them develop skills in budgetting.
  • Make them aware of bills that need to be paid, such as utilities and get them to play their part in turning off lights, closing doors and not letting the tap run when brushing their teeth.
  • Turn grocery shopping into a competition by finding offers, 3-for-2 deals etc.
  • Give them a small amount of pocket money from an early age on to get them to save up for a bigger purchase they want. It teaches them the value of saving, planning and prioritizing.
  • Open a savings account and get your child to deposit money in it, even if it is small amounts. Explain interest and compound interest to them and get them to see their money grow.
  • When your child is a little older, explain the concept of the stock market and investing and mention the investing account that you have opened in their name so they can also see how their investments are growing. Show them to sit tight when the market falls and the importance of patience on the long run.
  • Teach children about debt and how this is expensive in the long run. The best way for them to learn this is by giving them a small loan and charging interest on it. A tough lesson to learn but it will be a very valuable lesson. Even if they end up paying $5 on a loan of $10, those $5 will teach them a life long lesson on how interest and compounding interest on a loan will ultimately be a killer to their personal finances.
  • Go through credit card statements together with children or spend your weekly administration and filing system together with your “personal assistant” to teach them the importance of checking financial statements regularly for errors and to stay up to date on how (un)healthy your finances are.
  • Consider some type of “savings match” or interest you give children for every dollar they save if they haven’t yet got a savings account. This could be done monthly by showing you how much they have saved and after you count it together you give them a certain amount of interest or match their monthly contribution.
  • Explain to children how we are constantly tempted to spend money by adds and peer pressure. Teach them how these adds work and get them to evaluate whether they really need that new gadget or toy and whether it will add new value to their life.
  • Get children involved in sharing their wealth through donating to charities or fund raising for charities so they get to appreciate that there are many others who are far less lucky than they are and that that they can make a difference to the world by giving some of their money away or by getting involved in deciding which charity you should donate to.

Step 69 – Involve your Children – in detail:

  • Discuss with your partner the importance of teaching your children about the value of money and agree on a basic approach to this. It is important to discuss this and be aware of each other’s involvement and ideas so that you don’t clash over this.
  • Consider a set time a week, maybe at the weekend, which is dedicated to finances. This could be 30 minutes in which you discuss something new, go through a new target for the week or count savings and update financial statements. Depending on your child’s age these activities might evolve into more complex activities and the 30 minutes might become longer.
  • Find a balance between teaching your children the value of money, saving and investing without taking away from the fun. Make sure not to turn ALL of your fun family days into skimping or budgeting days – kids should also be able to enjoy these days! Don’t overload your children with information but see it as a step-by-step progression that takes time, skills and awareness to develop (a bit like compounding interest come to think of it!).

If done well, these finance lessons can become a great headstart for your children in life as it gives them so many skills that others might take years to discover by themselves when they are in their 20s and 30s. Just make sure to make it appropriate to your child’s age and awareness. Happy teaching!

Read more about my 100 steps mission to financial independence or simply decide to take control today and join us on our step-by-step quest on how to make your finances work for you, starting with step 1.

Step 68: Set aside Money for your Children

Step 68 of the 100 steps mission to financial independence: Set aside Money for your Children
Step 68: Set aside Money for your Children

Children cost money of course, even just their day-to-day expenses seem endless: clothes, food, extra activities and birthday parties to name just a few. But I take it for granted that if you have children, grandchildren or nieces / nephews (even if they are “adopted” and your friends’ children), that these expenses are covered in your budget, either in your regular categories, or under ‘presents’ if they aren’t your own children. If you haven’t yet got children, but are planning to have children, I again assume that by now you are financially savvy enough to have set up a savings account in order to pay for the initial “start up costs” for children: baby room decoration, push chair, car seats, clothes and all other assecories you’ll need.

But what about “later”? This might sound like a long time away still, but those children will at some point reach their 18th birthday and will go and try their luck in the real world, whether that is at college, travelling or trying a “real” job, there will come a time when they no longer depend on you (at least not officially – they might still come back home from time to time to ask for some extra money).

Wouldn’t it be nice to be able to give them something more than just a $50 bill when they leave the house, to get them set up? Or what about giving them something when they get married, buy their first house or have their first child.. Whatever it is that you decide, think about what you can do now to help them later. And remember that if you start on time you have the advantage to look ahead and use that best friend of ours: compounding interest to create a small fortune for your (grand)child(ren).

What and how to save

Let’s just calculate through some different scenarios to give you an idea on how to get started. For all of these we assume that you start contributing to these saving plans from the moment the baby is born (or let’s be realistic and say you do it as soon as your (grand)child is a month old).

  • Scenario 1: Open a savings account and set aside $10 a month. Assume an average return of 5% (which unfortunatley is not likely at the moment though!), an inflation rate of 2% and that you keep contributing $10 a month until you give the child the full amount. Your (grand)child would then receive the following amount: (numbers in 3rd and 4th column rounded to $50).


Total paid in Nominal value at end

Adjusted for inflation






$2520 $4500


25 $3000 $6000


  • Not at all bad if you could give your (grand) child some $3550 when they turn 18 or even $6000 when they are 25.
  • Scenario 2: What about instead of opening a savings account (which is unlikely to give you anything close to 5% for a while), you put that money in an investment accout, assuming a 7% return and 2% inflation rate? That works out as follows:


    Total paid Nominal value Adjusted for inflation


    $2160 $4350



    $2520 $5750


    25 $3000 $8100


  • As you can see, by just putting away $10 a month, even if you held it only til they were 18, you’d be able to give them more than $4300 or the equivalent of $3000 in today’s money.
  • Scenario 3: Of course, you might be able to set aside more than $10 a month. Let’s assume you’re lucky enough to live in a country that has a child benefit scheme in which you get some financial support from the government to help with the expenses for raising children. Imagine you were able to set all that money aside and invest it for your child? Child benefit varies greatly per country but let’s take the average of about $75 per month. Let’s assume we’ve still got an average of 7% return and 2% inflation rate. This is how much you’d have if you keep investing that child support:


Total paid Nominal value Adjusted for inflation


$16,200 $32,500


21 $18,900 $43,200


25 $22,500 $60,900


  • By their 18th birthday you’d be able to give your child $32,500 (with a current value of $22,000)! That’s a small fortune to me and it for sure would be to most 18 year olds!
  • That said, child support is generally likely to adjust for inflation, meaning that you get $75 this year, but $76 next year and $77.50 the year after. As long as you keep adjusting your investments along with this, remember that you would then end up close to the nominal value anyway. In that case your child would receive around $32.500 on their 18th birthday.

Of course the above are just some examples of have careful financial planning might give your child a nice head start when they turn 18 or 21 or whatever age you decide. Maybe you can’t survive without the extra child benefit that you are receiviving and therefore can’t invest all of that money. But what about half of it? Or even just $25 a month? $10? Go back to the budgetting steps to read more about how to budget and to build in priorities to decide whether you really can’t or whether you decide to prioritize other goals for your money. Even just the $10 will still give your child a nice pot of money to start their adult life that not everybody gets.

Step 68 – Set aside Money for Children – in detail:

  • Let’s start with how many children, grandchildren, nieces / nephews or other children in your life you (might) have and who you’d like to help financially when they come of age.
  • Investigate and decide how much you can invest either monthly or yearly. Remember that if you have several children (or might have several children) or grandchildren, you probably want to set it up equally, so that you don’t invest $100 per month for child one and only $20 for child two. Plan ahead and try and keep it equal!
  • Open an investing account for each child but carefully check how to do the legal side: make sure you can open it in their name (in some cases only parents can do this). If you are a grandparent and you can’t open it in your grandchild’s name, consider opening it in your name, but stipulate the child as the beneficiary and make sure to include conditions in your will that the money is to go to the child when they turn 18 and not to your heirs.
  • Set up automatic payments into this investing account.
  • Remember that the earlier your start, the more time the interest can compound, but even if your (grand)child is a little or a lot older, that doesn’t mean you shouldn’t still open it.
  • Decide when you want to give the money or the original investing account to your child. Instead of giving them the money, consider that your child could just continue to grow the money. Tell you child beforehand so they can start planning on what to do with the money, as otherwise they might be tempted to take it all out and spend it in just one crazy weekend.
  • Remember to open a new account for any additional children

Saving / investing and seeing your money grow can be really rewarding, but there’s an extra sense of satisfaction you can get from setting money aside for somebody else, and seeing their fortune grow even before they are aware of it.

Read more about my 100 steps mission to financial independence or simply decide to take control today and join us on our step-by-step quest on how to make your finances work for you, starting with step 1.