Series: Stages of the financial planning journey – Step 2: Where are you going?

In the first article in this series, I outlined the four steps that I think make up your financial planning journey, namely:

Step 1: Take stock of where you are. What is your starting point?

Step 2: Establish your goals and objectives. Where are you going?

Step 3: Make plans to increase your cash flow margin. How can you get to your destination the quickest?

Step 4: Control your cash flow. Stick to your planned route.

I then unpacked step 1 in the previous article by providing practical ways that you can determine your starting point by making use of a Net Worth Calculator as well as an Expense Tracker, both can be found in the free resources section on our website.

In this article we will be going over step 2: establish your goals and objectives. This is one of my favourite things to do on my financial journey as it is the time when I get to dream big so when you get to this step, I want to encourage you to do the same. Don’t hold back – let your imagination run wild and allow yourself to dream about the things that you feel would be impossible. Make sure that you take note of every dream and goal.

Your dreams and goals will be regarded as your pitstops and ultimately your destination on your journey. As much as you need to have a big specific goal that you would like to achieve (I think of this as your destination) you also need to have your other goals and dreams that you can achieve along the way. As with any journey, you need to refuel as you go and that is what it feels like when you achieve one of your goals – it gives you the energy and motivation to continue pursuing and working towards your destination.

Start by dreaming about your short-term goals, the kind of goals that you can reach early on in your journey. Setting these short-term goals are crucial to your mental wellbeing on your journey as they will give you the encouragement you need in the beginning when the journey may feel tough and unfamiliar.

Thereafter move on to your medium-term goals and then finally your long-term goals. You can have big and small goals in each timeframe. I want you to challenge yourself when setting your goals and to not just set goals that are easy to achieve. On the other hand, I also want you to be realistic when setting your goals as you don’t want to set unrealistic goals and then become despondent and discouraged when you don’t achieve them.

Here are some examples of goals to get you started:

• I want to be debt free within the next 5 years, excluding my mortgage
• I want to have my emergency savings account (3 – 6 months of expenses) set up in the next 18 months
• I want to achieve financial freedom by the age of 55 years old
• I want to go overseas every second year from age 40
• I want to pay for my children’s tertiary education so they don’t have student debt
• I want to have my house paid off 5 years earlier than planned

It is important to remember that everyone is on their own journey so don’t ever get sucked into comparing your goals with someone else’s as comparison is the thief of joy.

As I said previously, take note of all your dreams and goals. You can do this in whatever form works for you – bullet points, tables, on an actual timeline, using a vision board or whatever other method you feel will get you excited about your goals and dreams.

Regularly have a look at your goals and tick the things off that you have achieved. If you have not achieved a goal in the timeframe that you initially established, don’t give up. Take a look at why you haven’t yet achieved the goal, reset and carry on. Life throws a lot of curveballs and often things are out of our control so there is no shame in adjusting your goals to suit the new path that life has forced you on. This is YOUR journey, you decide the speed, pitstops and destination. 

I hope you enjoy dreaming about your future and everything you would like to achieve. Our next article in the series explains how to reach your destination the quickest.