posted in: Building Wealth

Financial Goals : A Complete Guide to Building Your Future

Introduction to Financial Goals

Long-term stability is something everyone strives for, and setting clear financial goals is a great way to get there.

These goals can be short-term, such as a specific purchase, or long-term, like buying a home or retiring comfortably.

As a financial advisor in Sydney, we understand the unexpected challenges that life can throw at you, while also balancing bills, and family commitments.

However, setting financial goals, no matter how small they may seem, can give you direction on putting money away to achieve your dreams and aspirations.

In this Montara Wealth blog, we’ll cover what financial goals are, why they are important, how to set smart financial goals, common examples for inspiration, mistakes to avoid when setting financial goals, and answer the question “Do I need a financial advisor?”

What Are Financial Goals?

Being able to set a financial goal and stick to it is one of the most proven ways to take control of your finances and work towards your aspirations.

In a nutshell, a financial goal is something that you wish to achieve through saving your money.

It is usually something that is easily measured and specific, whether it’s a house, a car, or savings for retirement.

Financial goals are usually broken down into different sub-sections, whether short-term or long-term.

A short-term goal could be a dollar amount that you wish to save, while a long-term financial goal may be a home or a fund for your child’s education.

Obviously, these goals have different strategies involved.

To purchase something as large as a home, you’ll need a plan and a significant amount of time in most cases. This plan helps to guide your day-to-day spending, saving, and investing strategy.

Setting clear, measurable financial goals helps individuals and businesses stay on track, prioritise their spending, and make informed decisions.

Why Financial Goals Are Important

Without a solid financial plan and a well-defined suite of goals, we rarely see financial dreams materialise into reality.

It is a crucial way to give your finances structure and get you firmly on the path to successful goals such as buying a home or enjoying a comfortable retirement.

• Provides Direction and Focus : With the many unexpected things that can arise in your life, whether personal or financial, a strong set of financial goals helps you make informed decisions day-to-day, it also creates a clear roadmap of where to go financially.
• Daily Motivation : Creating clear financial goals allows you to stay disciplined, but also creates motivation knowing that you are clearly working towards something in particular.
• Holds You Accountable : The more people who are aware of your financial goals, the more accountable and motivated you will be to stick by them. Having family members or friends along the way to track your progress not only adds a sense of accomplishment but also keeps you accountable to keep going.
• Easy to Measure Progress : By setting focused and clear financial goals, you will have a benchmark to evaluate your progress as you build. Being able to track your goals as you go is a great way to boost your own financial confidence, but it also allows you to adjust your strategy as needed.
• Fosters Financial Security : Financial goals, especially long-term ones such as buying a house or saving for retirement, help contribute to your overall financial security and reduce overall anxiety about the future.
• Promotes Smart Financial Planning : Setting goals forces you to properly plan when it comes to your finances. This may look like setting aside money for an emergency fund or investing for future wealth. Clear financial goals allow you to allocate resources smartly.
• Life Milestones : Nothing is more rewarding than hitting a major life goal, whether it be buying a house, funding education, or retiring comfortably. Through purposeful planning, you can ensure you have the resources needed to achieve these significant milestones.

How to Set SMART Financial Goals

At Montara Wealth, we approach all of our clients’ goals from a SMART perspective.

What do SMART goals mean? It’s an acronym in the financial world and stands for Specific, Measurable, Achievable, Realistic and Timely.

Working with a professional financial planner and breaking down your goals using this acronym helps you achieve actual results.

What are Some Important Questions to Ask Yourself when creating Financial Goals?

At Montara Wealth, we believe it’s essential to ask yourself a variety of questions before committing to any one particular financial goal.

The clearer the picture you have, the more likely you are to achieve your goal.

• What do I want?
• How much do I need?
• When do I want to achieve this goal?
• How much will I save per week to reach my goal?
• Why is this goal important to me?
• Is this a long-term, medium-term or short-term financial goal?
• How realistic is this goal, considering my financial situation?
• How can I best track my progress?
• How will I adjust my plan if I need to?
• Does this goal fit into my broader financial plans and goals?

These are a broad spectrum of questions to ask yourself, but by getting in touch with a financial professional such as the team at Montara Wealth, you can properly set yourself up for success when it comes to hitting your financial goals.

Common Examples of Financial Goals

Financial goals are commonly broken down into three distinct categories.

These are short-term, medium-term, and long-term financial goals.

So what do each of these types of goals look like?

Tips to Achieve Your Financial Goals

The sooner you lay out your financial goals and get started, the closer you’ll be to making those dreams a reality.

So where do you start?

There are a few different ways to go about it, and considerations you’ll want to make.

• Visualise and Focus : So you’ve decided to set out some clear financial goals, what do these goals look like in a dream reality? How will it impact you personally and your lifestyle if achieved? Is it a house you want or a specific type of lifestyle? Having a clear understanding of what this goal would look like in reality is a great way to stay motivated to achieve it.
• Make Goals Specific : Work out exactly what it is you want to save for, how much you want to save as a dollar amount, and when you want to have achieved the goal by. Instead of saying “I want to save money”, say “I want to have saved $6,000 by the end of the year”.
• Break Big Goals Up : A good way to stay motivated and consistent when working towards your long-term goals is to break them up into a number of mini-goals or milestones so that you can feel rewarded along the way.
• Reduce Unnecessary Expenses : Examine where your money is going daily and search for areas in which you can cut back. Can you have coffee at home instead of buying it? Is there a subscription you aren’t using that you can cancel? Redirect this money into your savings goals.
• Track Your Progress Regularly : Check in on your goals and financial situation regularly to see how you’re progressing. This helps you to stay motivated and adjust your plan if necessary.
• Celebrate Your Milestone and Be Patient : Acknowledging the small financial wins is a great way to stay motivated, especially when it comes to long-term financial goals. Be patient with yourself, stay disciplined, and remember that even the smallest amount put away adds up over time.
• Seek Out Professional Advice : Creating a strong financial goal pathway can be difficult. If you are unsure about what the best path to reach your financial goal is, consider speaking to a professional financial advisor. They can work directly alongside you to create a tailored strategy based on your goals and financial situation.

For long-term goals like a comfortable retirement, experienced retirement financial advisors in Sydney can build that strategy and keep it on track as your life changes.

Mistakes to Avoid When Planning Financial Goals

There are a variety of practices one can do that are harmful to their financial goals, even when they don’t initially see it as that way.

In the table below, we’ve broken down the main mistakes we see at Montara Wealth, along with the solutions to address each one.

Tracking and Reviewing Financial Progress

To summarise, moving forward with your financial goals once they are set, you can best track and review them by doing the following :

• Set clear milestones and benchmarks
• Use a budget or expense tracker
• Monitor your net worth regularly by subtracting your liabilities from your assets to assess your financial health
• Track your savings and investment accounts through apps or brokerage platforms
• Review your debts and repayment plans to ensure you stay on track
• Review your financial goals regularly, assess their progress, and determine whether changes need to be made
• Evaluate progress against key metrics such as savings rate, debt-to-income ratio, and investment returns
• If you are working with a financial advisor, schedule semi-regular check-ins to review goals and monitor progress
• Acknowledge when you hit milestones or reach a significant financial goal

Conclusion : Stay Committed to Your Financial Goals

If you want to create realistic and meaningful financial goals while also remaining committed to them, it’s time to start thinking about choosing the right financial advisor.

The team at Montara Wealth are here to help you achieve your goals and get you moving on the path towards your financial dreams.

As a privately owned financial advisory firm, we work with individuals, families and businesses to create a comprehensive plan that incorporates investments, savings, retirement planning, and more.

We offer a holistic and strategic approach to advice and help our clients achieve financial stability and security by developing customised financial plans to achieve both short-term and long-term goals.

Don’t wait to start your financial journey.

Book your complimentary consultation with Montara Wealth to take the first, crucial step toward achieving your wealth goals.