I talked to a friend that had been working for almost 10 years and he did not know what he wanted. He had not written any financial goals or things he wanted to achieve in the future. He was doing okay with his career as I can say that he was in a good position in a company where he worked at. The only thing that I worried was that he did not know what he wanted in the future. As Chuck Palahniuk, “If you don’t know what you want, you end up with a lot you don’t”.
Many times that he earned from his job, he did not have not any goals how to set aside his income. He told me that everytime he got his salary, he just spent it and waited until the next cut-off. He told me that he was like a rat trapped in a cage. He was promoted from his job many times but it he could not save because as his income increased his expenses increased as well. Clearly, I understood that he had no goals that was why his personal finances were at lost. As a Financial Advisor, my goal was to help people to create a sound financial future for themselves while protecting themselves for the present. It was important for me to know if what their goals were and instilled discipline to them to create a habit of delayed gratification for their financial goals. As Jim Rohn said, “Discipline is the bridge between goals and accomplishments”.
In setting goals, we had to use the BeSMART. Let’s just say that one person set a goal of house renovation budget of Ph1,500,000.00 after 10 years.
Be- Begin with end in mind. Set goals that you wanted to achieve after 10 years. Let’s say a person needed a fund for his Ph1,500,000.00 for house renovation. This would be the reason why would he save and invest funds today to achieve the Ph1,500,000 budget for the renovation of his house.
S- Specific. The goals should be specific. Going back to the person who had a goal of house renovation, he should know what kind of design and plan would be house like. Was the house painted green? Red? Etc. Would there be a parking slots? How many floors? To whom he would look for a contractor, materials needed in the renovation, manpower for construction, building permit, and a lot more. It should be specified so that the goal was guided, thus, it could save more time to achieve the goal.
M-Measurable. The goal should be measurable. How much would be the total cost of all the renovation? If he set budget of Ph1,500,000.00 for the renovation, how much money he should save now to achieve the Ph1,500,000.00 budget? Would he be investing his savings now or he could start new business to add up to his savings? Would Ph150,000 per year enough to reach his Ph1.5 M budget for renovation, or should he have buffer? Or as much as possible he should save big as soon as possible to reach his Ph1.5 M goals.
A-Attainable. Would Ph150,000.00 per year attainable? How could he attain it? Could he do something if he was only relying on his salary? Or he needed to create another source of income. If it was not attainable, he would have a difficulty in achieving his goal.
R-Realistic. The goal should be realistic. Would the Php1,500,000.00 budget after 10 years near reality? If that person only earned Ph500,000 per year, it would be hard to reach the budget for house renovation. But if he had a business that could possibly give him savings of Ph150,000 a year, that could be realistic.
T- Time bound. There should be a deadine. In setting goals, step by step deadline should be done in order to reach the goals. For the goals of Ph1,500,000.00 budget for 10 years, after 5 years that person should have Ph750,000.00 already to know if there was a progress.
After setting your goals through BeSMART, taking action was important. Creating strategies, tactics, implementation, monitoring and assessing if you were progressing. It may be difficult but achieving your goals could give you a sense of fulfillment that you were capable of achieving the things you wanted.
Set your goals and achieve it!
To learn about Financial Planning and achieving your dreams and aspirations in the future.
You may contact me:
Archie M. Yuki
Associate Unit Manager
The Insular Life Assurance Ltd., Co,