Wealth Wisdom Series: The importance of setting financial goals

Many studies have showed that only a small number of South Africans are able to retire, whilst maintaining the same lifestyle.

This begs the question – how do I ensure that my finances are future fit?

The answer is fairly simple.  Start with the end in mind and define your financial goals.

Start dreaming about what you want to accomplish in the years to come.  When you start defining your dreams as financial goals, they become more realistic and within your reach.

Why is it important to have financial goals?

1: Setting clear financial goals helps you to see the bigger picture of your current financial situation. It puts you in the driver seat, giving you the control so that you can start to navigate your life in accordance with a financial plan.

If you do not know where you are heading, how would you know what to expect and react when a crisis occurs? You become your own worst enemy, where important financial decisions are left to the last minute creating a reactive vs a proactive financial mindset.

2:  Once you have a clear set of financial goals in place, you will be able to decide on a well-defined action plan suitable for your needs.  This plan will focus on important factors, which includes retirement planning, long and short-term risk cover as well as a medical aid – all of which will help you to reach your financial goals.

3:  You will be able to measure your financial milestones to ensure that you are on course to reach your financial goals.  Each step in your Financial Plan must lead to another, until you reach the goalpost.

Am I alone in this process?

Absolutely not.  Although you remain accountable for your own financial wellbeing, you will most likely achieve better results if you have the assistance of a certified financial adviser.

Your financial adviser will help you to give order to your goals and guide you to know which are the most important.

One of the key areas of financial advice, is a regular review of your financial plan and strategy – which will ensure that you are indeed still on course to reach your goals, ultimately providing you with a certain amount of financial freedom and control.

In summary

The process of setting clear financial goals is crucial as it ensures that you have a clear view of your current financial situation. Knowing what you want to achieve, helps you to create a financial plan that will serve as a roadmap. It puts you in control of your financial future. Doing regular reviews of the action steps already taken provides guidance on if you are successful or not.

Financial advisers are equipped to provide the necessary guidance and assistance, to ensure that your goals remain realistic and within your reach.

In our next Wealth Wisdom episode my colleague Kobie Kritzinger will be discussing why you need a will and the impact that dying without a will can have on your finances.

Turn your financial dreams into a reality. Contact your financial adviser today to ensure that you have a proactive goal orientated plan in place.