Welcome to February
Now that we are past the first month, many of us have broker our new year’s resolutions whether to get regular exercise, cut back on alcohol, save or invest more, or just be nicer to that nosy neighbour. One thing that helped me years ago to achieve my personal goals was not only to make them specific, achievable and a stretch, but to also build in margin. What is margin? It is additional space to allow for recovery when you inevitably fall or fail.
When I was in my mid 20’s I wanted to stay in physical shape by jogging, but I struggled to make it a regular part of my life. So I decided to make it my new year’s resolution. I decided to make the goal to jog 3 days per week. How I built margin in, was to make that goal cumulative for the year. Meaning if I only jogged twice a given week then I had to make up for it down the road by jogging 4 times in a week. I was able to achieve that new year’s resolution that year and building margin in my life became a great tool to achieve goals and not give up.
With that in mind, here is a reminder on making financial goals. But remember to build in margin for yours and if you want help my advice is free:
Setting Financial Goals: Your Roadmap to Financial Wellness
Financial stability is more than just earning and saving money; it's about setting clear, attainable financial goals that pave the way for a secure and comfortable future. Here's a quick guide to help you get started:
Assess Your Current Financial Situation: Begin by taking a comprehensive look at your income, expenses, savings, and debts. Understanding your starting point is crucial for setting realistic and achievable goals.
Define Your Financial Goals: Be specific about what you want to achieve. Whether it's saving for a down payment on a house, creating an emergency fund, or planning for retirement, clear goals give you direction and motivation.
Set SMART Goals: Make sure your goals are Specific, Measurable, Achievable, Relevant, and Time-bound. For example, instead of saying "I want to save money," say "I want to save $10,000 for a down payment on a house in the next two years."
Create a Budget: Develop a budget that aligns with your goals. Track your spending, identify areas where you can cut back, and allocate funds towards your financial objectives.
Establish an Emergency Fund: Life is unpredictable, and having an emergency fund can provide a financial safety net. Aim to save at least three to six months' worth of living expenses.
Invest Wisely: Consider investing as a way to grow your wealth over time. Research different investment options and choose those that match your risk tolerance and financial goals.
Monitor and Adjust: Regularly review your progress and make adjustments as needed. Life circumstances can change, and it's essential to stay flexible and adapt your financial plan accordingly.
Seek Professional Advice: If you're unsure where to start or how to achieve your goals, consider consulting a financial advisor. They can provide personalized guidance and help you create a tailored financial plan.
Setting financial goals is a proactive step towards financial wellness. By taking the time to plan and prioritize your financial future, you'll be better equipped to navigate life's challenges and opportunities with confidence and peace of mind. And don’t forget to build in margin for life’s expected and unexpected interruptions.
Sincerely,
Norman S. Holmes
CCO, UDP, B.A. (Honours), AMP
Vice President
Drake Financial Ltd.