Whether it’s finances or fitness, spending time on setting your goals can reap rewards
When it comes to the big things in life we all have our goals. Getting promoted at work. Educating the kids through school. Saving for a comfortable retirement.
It’s important to aim high. But if the goals you set are overambitious, with no checkpoints along the way, you could be setting yourself up for disappointment. So it may be a good idea to make sure your goals are realistic and achievable.
One area where setting goals can be beneficial is health and fitness—whether it’s losing a few kilos at the gym or aiming for a PB at the next half-marathon.
Check out the video below, where corporate health consultant Jack Hemnani talks about how he helps his clients set realistic goals and stick to them.
Think short, medium and long term
Your finances could benefit from the same treatment as your fitness. When you’re saving and investing your money, you need to know what you’re aiming for.
Think about how much you earn and how much you spend. Are there any ways you could cut down your spending to allocate more money towards your goals?
It could also be a good idea to make your goals and timeframes realistic, and set interim targets. Let’s say you’re saving $25,000 for a new car1:
- You could set yourself a realistic short-term target of saving $5 a day by going without a coffee or bringing lunch to work, and set up automatic debits to a high interest savings account.
- You could set a ‘trigger’ amount for the medium term—say $1,000—and when you reach it you could consider rolling your savings into something that may generate higher returns, such as a term deposit or a diversified investment option.
- You could start planning your next long-term challenge once you reach the magic number of $25,000 and achieve your goal—after rewarding yourself, naturally.
And different goals could benefit from different approaches.
When you’re putting money aside for retirement, superannuation could be an effective tax-friendly option to boost your savings, depending on your circumstances.
But with super, your money is locked away until your preservation age. So if you’re looking at achieving a more short-term goal—like saving up to buy a new car—you may need to investigate other options where you could access the savings sooner.
Six steps to creating your financial goal checklist
- Big picture. Think about your overall long-term goal—this may not necessarily be financial but more about how you want to live or how you want your family to live.
- Magic number. Work out how much money you’ll need to achieve your goal.
- Small steps. Look at the incremental steps you need to take to achieve your goal—you may feel more motivated to achieve bigger goals if you set checkpoints along the way.
- Write it down. Try this…just for a second. Close all your apps, put down your smartphone, pick up a pen and paper…and write it down. It’s amazing the effect that putting something down on paper can have on your motivation, especially in a digital age. Sure, you can then get on to your laptop to set up some useful spreadsheets and reminders. But you’ve got a written record to remind you.
- Back on track. Here’s the thing. You might initially fail. As a wise man2 once said, ‘Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.’ While there might be ways you can stop yourself going off piste—such as transferring a set amount to your savings account when your pay cheque comes in—it’s a good idea to work out how you’re going to get back on track when you (inevitably) fall over.
- You deserve it. As humans you can say we’re hardwired to expect a reward. So you might want to treat yourself when you reach your goals—every step along the way.
Unlock your goals and shape your future
AMP’s Goal Explorer allows you to build a timeline to achieve your goals. You can add new goals, update existing goals and even view goals in your personalised timeline within your MyAMP account.
1 The case example is illustrative only and is not an estimate of the investment returns you will receive or fees and costs you will incur.
2 Irish novelist and playwright Samuel Beckett.
3 biggest household expenses05 November 2019 | Manage my money We check out the three largest contributors to household spending in Australia and where people would source cash if living expenses increased. Find out more with AMP. Read more
5 life insurance questions you’ve always wanted to ask24 April 2019 | Manage my money Find out what impact your weight, age and smoking status may have on your ability to buy life insurance. This list from AMP explains the impact of these factors. Read more
Tips for when you land your first full-time job29 January 2019 | Manage my money Congratulations on scoring your first full-time job. To get you up to speed with some of the important money-related stuff, here are some tips from AMP. Read more
This information is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances and the relevant Product Disclosure Statement or Terms and Conditions, available by calling 13 30 30, before deciding what’s right for you. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you.
All banking products are issued by AMP Bank Limited ABN 15 081 596 009, AFSL and Australian Credit Licence 234517.
All information on this website is subject to change without notice. Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek professional advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP does not accept any liability for any resulting loss or damage of the reader or any other person.