A gentle nudge for your finances: what are your money life goals?

A Gentle Nudge For Your Finances: What Are Your Money Life Goals?

 

 

Do You Have An Aim?

So recently I wrote a blog post about Why It’s Ok NOT To Have An Ambitious Life Goal. Now, after reading that, you may be thinking, I don’t even have an idea what goal I even want to reach, let alone whether it is ambitious or not!

If this is you, then don’t worry. The MAJORITY of people, don’t have a life goal when it comes to money, and in truth, it only really hits them when retirement is looming.

While you have TIME though, working towards a clearly defined goal is much much easier. I’m not talking new year’s resolutions here – this is serious stuff if you want to sort your money out!

Unfortunately the days are over where our retirement money coming from our workplace will be enough to live on – that’s because we’re all living longer, and companies cannot afford to do it. While my NHS pension is one of the most generous compared to other companies, even that won’t be enough for the kind of lifestyle I want in retirement.

I have some suggested ways that you can get laser-focused on what it is you want to achieve financially.

Enjoy!

What is your Lynch-Pin Goal?

When thinking about your money, what is the ONE thing you need to focus on improving? This “one thing”, once accomplished, will help you unlock several other goals afterwards.

For me, it’s “GET OUT OF DEBT”.

The reason it is a lynch-pin goal, is because it is holding me back from:

  • saving properly
  • investing properly
  • being money-stress free
  • having weekends off from working overtime
  • not being able to do things I want to do on my bucket list
  • reaching a positive net worth

I currently spend £850 per month on debt repayments of various kinds. This goes up to over £1000 per month if I was to factor in my student loan (which comes out of my salary before I get paid). When I think of it like this, I realise how much I could do with all that money, and how much it is holding me back. Just half of that into my investments would SIGNIFICANTLY accelerate me towards my net worth targets.

For you, it might not be getting out of debt, but it might be – “get through a month without running out of money”, “create a 6 month emergency/f***-off fund”, “reach XX net worth”, “learn more about investing”.

So figure out your lynch-pin goal, and make it your mission for the next 6 months to achieve it (or at least make a decent dent into it). I won’t be debt free for another couple of years yet, but I can see the light at the end of the tunnel and remembering this keeps me motivated! Come and share your goal over in the facebook group so we can hold you accountable! (Ask for an accountability buddy if you want to!).

Net Worth Targets

Starting soon, I’ll have a free 3-part video series on net worth and how you could factor in targets to hit that take you from where you are now, to where you want it to be. If you don’t know what your net worth is, or what it should be, then you’ll want to get onto this training. Sign up for a spot in my upcoming webinar, “How to unleash your inner investor, even if you’re broke and can’t be arsed to read the financial times” and you’ll have access to the *FREE* video training in the next couple of weeks.

In essence, your net worth is your highest indicator for how well you’re managing your money. When I assess a patient coming into A&E, I look at their early warning score which is made up of their vital signs (pulse, blood pressure, temperature) to decide how quickly they need to be seen. A higher score means they are really unwell, and need urgent treatment.

This is sort of like net worth, except that if it is really negative, this indicates that you have more money going out than you have coming in.

Net worth is the difference between your assets and liabilities. The sum you need to do is:

Total Assets – Total Liabilities = Total Net Worth

Once you’ve worked this out, you can then figure out what you next target is. If you’re negative, then the next target is to get to “0”. This can be achieved in a combination of improving the value of your assets, and decreasing your liabilities. If you’re already above 0, then you’ll need a new target to work towards.

Retirement Goals

If a lynch-pin goal, or a net worth goal are not really for you, then you could work out what you need in retirement. The Money Advice Service has a really good pension calculator that you could start playing with. It demonstrates how much you’ll be expected to have to retire on, using your current parameters. You’ll need to find out the current value of any pension you’re in, plus how much you contribute per month, and how much your employer contributes. It will then tell you your shortfall (if any) or whether you’re on track.

It’s a real eye-opener, and does highlight how much money you need to be putting aside in order to have the kind of retirement you want (and if you want to retire early, you’ll need to be putting away a hell of a lot more!).

Final Thoughts

I hope you have found that useful – it really doesn’t matter what method you use to create a goal for yourself, as long as you make one and then you TAKE ACTION! You can learn all the theory you want, but eventually you’ll need to do something. Keep it simple and pick one thing to work on. If budgeting is what you need to get on top of, then that’s where you start (I’ll be going over this in my webinar too!).

Enjoy your weekend,

Lots of Love,

 

 

 

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