Setting money goals for your future
When you think of money goals, does your goal sound more like this,
“I want to earn more money to support my family.”
or like this:
“I want to earn enough income to provide for my family’s needs, have an emergency fund prepared, settle all debts, and keep us financially secure.”
Very few Filipinos set money goals. For those that do, these goals can be very vague, have no clear plan of action, timeline, or are just impossible.
It’s understandable that you may want to keep your options open, thus making goals vague. But when your financial goals are not tangible or specific, you’re less likely to take action.
Here are five practical steps to set your money goals and achieve the financial goals you set.
Set a budget (and stick to it)
First, develop a feasible budget and then stick to it. If you have a financial goal, you’re going to have to set a part of your income to fulfill your money goals.
For example, you want to pay off your loan within the next five years. It’s a specific, measurable, and time-bound goal. But with the income you’re currently earning and your average expenses, is it a feasible plan? If it is, then this is an achievable money goal.
You have two options: pay a fixed sum higher than the minimum payment, or set aside a percentage of your income to pay your debt. You can then adjust your budget for other expenses. But if you decide to pay for a certain amount or percentage but don’t adjust your budget for other expenses, your income may seem insufficient and make an excuse to lower how much you set aside for your financial goals.
Write down your financial vision
Let’s face it: long-term goals that take years to achieve can be difficult to sustain because most of the time, you forget about it. When you write down your financial vision, set a physical reminder–like a list–of your goals rather than just keeping it in your mind and forgetting it.
Break down your goals into amounts tied to years
If you want to pay off your debt in five years, you have to see how much you’re going to set aside every year to achieve that goal. Saying “I’m going to pay off my debt,” is different than “I am going to pay off my debt within five years and it is feasible for me to lose this much money every year because this will go towards my own financial goals.”
Review your spending habits
List down habits that align with your goals and bad habits that could hinder you from achieving your goals. Write it down next to your financial vision.
For example, good habits include:
Spend less than you earn in a month.
Wait for at least 24 hours before making a large purchase to make sure if you really need this product.
Always pay your credit card bill on time, and in full.
Now, list down your bad habits. A few examples include:
Not having an emergency fund or savings.
Spending more than you earn.
Using your credit card way more than you can afford to repay.
It’s important to list down your good and bad habits because it shows how fast or slow your progress is in reaching your money goals. If you have more good habits than bad habits, it will be easier for you to reach your goals. On the other hand, if your bad habits outnumber your good habits, you know you’re bound to fail.
Implement your plan and keep track regularly
Put your financial plan into action and review your progress regularly. This can be done daily, weekly, or monthly as necessary. Setting a goal is different from setting a reachable and specific goal. A more specific and feasible goal allows you to stay focused in reaching them.
Allow us to help you stay on track with your savings by enrolling in Metrobank Online and hitting your financial goals without miss.
