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!

Day 31 / 31 Set Goals and Visualize your Dreams

Day 31: Set Goals and Visualize your Dreams
Day 31: Set Goals and Visualize your Dreams
Day 31: Set Goals and Visualize your Dreams

Congratulations!! You’ve made it to the last day of the 31 Day Challenge to Financial Excellence! Some days might have been easier and others more difficult, but you held on and continued until the end. That’s a good sign as it not only means that you’ve probably made some huge progress in many of your financial areas, it also indicates that you are much more likely to appreciate the progress you’ve made and to keep up giving financial planning a prominent place in your life.

And that is also the very last challenge of this series: to set goals and to visualize your dreams in order to keep moving forward even now you’ve come to an end of the 31 Days. Continue reading “Day 31 / 31 Set Goals and Visualize your Dreams”

Day 28 / 31 Celebrate your Victories

Day 28: Celebrate your Victories
Day 28: Celebrate your Victories
Day 28: Celebrate your Victories

During the past few weeks and in the next weeks, months and indeed years, you hopefully will have and will continue to set new financial goals. Setting goals is one thing, but achieving them is a whole different matter. Goals are usually easy to set and difficult to achieve and require real commitment and dedication. As you continue on your journey to financial excellence, your goals might become bigger and more abstract which in turn makes it more difficult to see your daily efforts paying off.

You can make goals more tangible by not focussing on the end goal but on smaller milestones along the way, making it easier to see progress.. Then – and here is the most important part – you should celebrate your victories. Once you have got together half, a quarter or even just 10% of your $10,000 savings goal – celebrate. Continue reading “Day 28 / 31 Celebrate your Victories”

Day 18 / 31 Track your Progress

Day 18: Track your Progress
Day 18: Track your Progress
Day 18: Track your Progress

One of the most fun parts of setting goals is seeing yourself getting closer to them with each step that you take. By tracking your progress, achieving financial excellence is not just a great end goal in itself, it will also become a fun journey with many smaller milestones to work towards to and keep track of along the way.

You can track your progress for many different financial aspects, such as your net worth, your savings, the debt you are paying off, your emergency fund or your pensions. The options are endless.  Continue reading “Day 18 / 31 Track your Progress”

Step 95: Visualize your Dreams

Step 95 of the 100 Steps Mission to Financial Independence: Visualize your Dreams
Step 95: Visualize your Dreams

Today we’ll step away from the numbers and figures and logical planning for a moment and instead focus on a fun step towards financial independence: visualizing your dreams. This step is the ultimate step to all of the following:

  • keeping up your motivation
  • setting goals
  • not forgetting to live in the “now”

We’ve discussed the first two points in detail in several of the previous steps, but the third one we haven’t yet looked at so much. Let’s discuss the importance of that third point through an example: imagine a couple who gets really inspired to become financially independent. They make a budget, cut expenses, start a side hustle to earn some more money to invest and they see their efforts paying off as their bank account increases. So they hustle a little more, cut another few expenses and speed up the process. But with time they become so absorbed by this process that other things are being cut too. Even though they have a fair amount of money, family holidays are “too expensive”, clothes are recycled well past their “best before” date (which makes the children an easy target to laugh at at school) and any real family time is disappearing quickly as the side hustle takes up any valuable time the family might have had together. After many years of dedication and hard work their bank account finally reaches that milestone of $1,000,000 that they had set themselves. The couple gets ready to celebrate this moment and loosen the reins a little – not wanting to retire completely but at least to work less – only to find that their children have gone off to college, friends from the past are have ceased to be friends as they have hardly seen each other in recent years as the couple had either no time or no money to attend get-togethers. They are not longer members of their sport clubs and realize they don’t know that many people anymore. There are no photo albums on the shelves with photos of happy family holidays, no memories of fun days down at the beach or up in the  mountains at the weekends and they can’t really remember having taken the children on any visits to the theatre, a museum or even the cinema. The couple never had time for fun activities and only ever thought of making money and then some more.

And what for? What is the point of having $1,000,000 in your bank account if you can’t enjoy it? What is the value of money if not to use it and enjoy the little things in life? Spending time with the people we love? More than those $1,000,000 isn’t it important to have time to do what you want to do and to make a difference in the world? Continue reading “Step 95: Visualize your Dreams”