21
April
2017

Small goals are important too!

Focus on small goals as well as big!

Often when financial planners speak to clients about goals, the focus is all on the big stuff. Buying houses and retirement are usually top of the list, but there are lots of other things we all want in life that should not be forgotten.

Many of our short term goals, things like a new lounge suite or an annual holiday are usually funded through our ongoing cash flow, perhaps with the use of credit, and can be achieved with limited planning.

The goals that often remain unachieved are those that are too expensive to be funded by ongoing cash flow, yet seem too minor to include in financial plans. If we want these to be more than pipe dreams, we need to establish actionable plans to achieve these goals.

These mid-range goals are things like an overseas holiday, private education or adding a pool to your home. Most of us have these sorts of desires but fail to put a plan together to achieve them.

The first step in achieving these goals (from a financial point of view) is to work out how much they will cost. We don’t want guess work here, we need research, identify exactly what it is that you hope to achieve and determine the cost. If we are talking about a holiday, find out the places you want to go, for how long, what things you want to see, what sort of accommodation and all the specifics. For education identify exactly what school, from which age.

Once you identify exactly what you would like to achieve and determined how much it will cost, a time frame needs to be established. Again be specific, the secret to turning dreams into goals is in the details, they turn vague dreams into actionable goals.

If we know the cost and the time frame, it is simple to establish how much needs to be saved in order to achieve the goals. If it is going to cost $10,000 in 2 years, we know we need to save $100 a week (approximately) to achieve the goal.

The key to achieving this saving is the development of a savings plan, or modifying your existing plan and allocating the necessary savings to the plan. This is likely going to require identifying areas within your discretionary spending you are prepared to sacrifice in order to achieve your mid-term goal.

If it is not possible to save enough to fund your goal in the required time frame, which could be likely, it may be necessary to compromise on either time frame, or other elements of the goal to reduce the cost.

 

Theses medium sized goals are important, and putting together an actionable plan will lead to you achieving them as well as the big stuff.

Author; Alex McKenzie Categories: Future Financial Services Blog

About the Author

Alex McKenzie

Alex McKenzie

Owner at Future Financial Services

Past:

  • Paraplanner at Zammit Partners Investments
  • Unit Trust Administrator at Colonial First State

Education

  • University of Western Sydney
  • Penrith High

About

As a Financial Planner I help people to achieve what they would like in life. This involves helping you to identify the things in life they would like , developing plans to help achieve them and strategies to protect what you already have. We do this by providing Financial Advice to guide you through your life stages.

The financial planning process involves determining a clients current situation and financial objectives and tailoring strategies to assist in best achieving those objectives.

I am an expert in superannuation, investments and insurance, these are tools we use to help you achieve your goals.

I aim to use my knowledge of superannuation, taxation and Centrelink to efficiently use your assets and income to achieve your financial goals.

Retirement and pre-retirement planning, wealth creation, asset protection, insurance planning and estate planning are all areas of advice that I provide.

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