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Setting your goals

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Goal setting is an attitude to life. It puts you in charge.

As you go through the process of getting financially fit, you'll find that goals pop up everywhere. Big, long term goals are where you want to end up. Smaller, short term goals are the steps that help you get there.

If your big goal is to run a marathon next year, you'll need a training plan with a number of smaller goals to help you through your training. Your first goal might be just making it round the block on your first training run.

Getting financially fit is no different. You might have a big goal to own your own house in the next five years. To get there you'll need a plan that includes a series of smaller goals - maybe you'll need to save money for a deposit or pay off a student loan as the first step.

Don't worry if you find it hard to set long term financial goals for 30 years from now. Set your horizons closer.

Some horizons should be close

If you're young you won't find it easy to set savings goals for 30, 40 or more years off. Set your horizons closer - make a plan to save, say, $5,000 in the next five years. You could allocate half that to travel, and the other half to an as yet unnamed long-term project. In five years you might for instance, want to start a business, do some study, or buy a house. All of these will get you into the savings habit, and should lead eventually to you saying - "that was a good decision."

Take some quiet time, when you are not under pressure, to set your goals.

Be specific, realistic and write each thing down. You might, for instance, set goals like:

Saving $20 a week
Paying off your credit card debt in six months
Saving for a new car
Paying off your mortgage in 15 years instead of 25
Increasing your income by $5,000 in the next year
Saving $4,000 for an overseas trip next year
Maintaining a retirement income equal to 70% of your pre-retirement income.

Use the My Goals worksheet to write your goals.

Keep your goals within reach

Make your goals easy to remember. Write your goals and how you are going to achieve them on one piece of paper for quick reference.

Write your goals and your plan to achieve them on a single piece of paper. Ideally, the whole thing should be simple enough to carry around in your head. Keep it handy for quick reference.

For more information, visit www.sorted.org.nz