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Got Goals? Get a Plan.
Ever wondered why some people seem to always to have enough money to achieve anything they set out to do? The difference between the financially wealthy and those who live one payday to the next lies in the ability to achieve their goals by prudently and diligently managing their money. Some of the world’s wealthiest people came from ordinary or even poor backgrounds but understood the value of setting goals and making a plan to achieve them.
That’s what a budget is – a plan of how to save, spend and invest your money on an ongoing basis to achieve the things you seek in life. Mentor, consultant and life coach Tony Woodroffe of TWLifecoach.com shared with us his advice on how to go about making a plan to achieve your goals. “Budgeting for goals isn’t easy,” he warned. “It requires discipline and getting into the habit of controlling how you spend your money and how you invest towards your goals.” Woodroffe believes in the equation: “Plan To Work + Work to Plan = Success.” In other words, one does not accidently achieve goals, it’s a step-by-step process.
Determine Your Available Income & Expenses
“You must know what you are working with, what your bills and expenses are and then, set out to live within your means,” Woodroffe maintained. This means looking at how much money you actually bring home and examining your cheque book, cash receipts, credit card statements, insurance and utility payments and more to find out on what you are actually spending.
Write Down Your Goals and Prioritise Them
Think about what you want to achieve and write them down. Figure your goals out in terms of whether they are achievable in the short term, medium or long term. Woodroffe then advises, “Learn to prioritise your goals. Your main goal should be to focus on paying your bills. Only when your bills are paid will you have the peace of mind to go out, make something of yourself and achieve your life goals.”
Create Your Budget and Spending Plan
When working out your budget, concentrate first on allocating money to meet your needs, and only then, the ‘wants’ you can comfortably afford. Woodroffe recommends that you scrutinise you think your ‘needs’ versus your ‘wants’. “Everything you buy, look at it as an asset or a liability.” What you think you may ‘need’ may actually result in being an added expense to you.
Plan To Save Towards Your Goals
Always include a plan for saving regularly, no matter how small an amount that may be initially. Also, look for ways to save where you thought there were none. “Learn to make money with the money or time you have invested,” Woodroffe advised, citing the example of renting a room rather than an apartment and saving the difference in rental cost. Another was looking for opportunities to create residual income. “I would advise any young person to look for a way to make money while they are asleep.” He suggested having a second job operating an online business but cautioned, “You have to be serious and disciplined about it, setting aside time to operate and manage that business.”
Be Wary Of Reckless Spending and Using Credit
“Reckless spending is but the worst distraction and path to failure,” Woodroffe warned. “The temptation of having credit cards can be the most dangerous weapon. They make you make decisions based on wants and impulse rather than on logic. I personally put mine in the freezer. While it was thawing, I had the time to think, ‘Do I actually want this? Do I need it?’”
Be Patient, Realistic and Re-Assess Periodically
Attaining your goals does not happen overnight. It takes time, patience, a disciplined approach to managing your money and above all, looking realistically at your finances and spending habits. It may be that you may have to adjust your current lifestyle and cut back in the initial stages but your goals, whatever they are, are achievable once you have a plan, which you should review periodically.
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