Obstacles to Financial Goals
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You have made a goal and you are all set to reorganize your financial life in a meaningful manner.
Assuming you have constructed the list based on your value system, nothing should be standing in the way of the objective. As these are your values and not somebody else’s, then motivation should be easy and success situated around the corner.
Beware of Unscheduled Spending
One of your medium term goals was to accumulate a nest egg that you will use to wipe out debts. The saving plan is proceeding very nicely and then the car breaks down, the repair bill is horrendous and it seems more prudent to let the old vehicle go and buy a new one. Suddenly, a huge chunk of capital goes missing for the down payment. Many people teeter-totter along the time line of their goals in this manner. No sooner have they got a good way towards the target than something happens that makes them waiver. The argument for purchasing that new 50 inch flat screen TV just in time for: The World Series”, goes like this…”We’ll, you know we do have the money, we can afford it!” Yes, that’s perfectly true, you can afford it but you lack the financial discipline to attain your goals and thus step away from financial interdependence to something much more restrictive financial dependence.
How to use Goal Setting to make you Wealthy
OK the above example works reasonably well for most people. Providing you are earning you can keep on replenishing the pot and readjusting your goals as you go. However, it is important if you want to reach financial independence you make the system work for you. Yes, unforeseen expenses will pop up, so how do you allow for these things and yet remain on course?
Restructuring
Maybe you were too “gung ho” in the first place. You determined to pay off all credit card debts in three years but your cousin Minnie decides to get married in Cancun and you simply must go! You begin using your credit card and sadly discover the repayment plan is now going to take 5 years instead of just three. At this point you need to restructure the plan. Reduce the amount you intended to pay each month to pay off the debt. With what is left over, open a new emergency account that is designed to take into consideration these unscheduled spends. The end dates may have to be altered, but you will reach them more surely by embarking on this course. Instead of paying $300 a month towards clearing credit card debt, you reduce the amount to $200. By now you have paid off a portion of your outstanding debt, but all of a sudden it has increased back to $4000 because you had to use the card on some unforeseen expense. Your time line has increased to 20 months, but that is still less than 2 years and you have commenced by creating a savings account, which is there to cope with the unexpected. OK it might all take a little longer, but this way you will avoid the plateau effect and stand a substantially increased chance of attaining the objective, which is what goal setting is all about, isn’t it?
Related Posts
- Identifying Financial Goals
- Setting Deadlines on Financial Goals
- Creating Short Term Goals
- How to Set Financial Goals for Couples
- How to Save Money for a Down Payment
- How to Set Financial Goals as a Couple
- Prioritizing Financial Goals
22 May 2008, 3:23 pm
[...] Identify and Assess Obstacles to your Financial Goals - There will always be obstacles. It is your job to identify those obstacles and find ways to overcome them. [...]