Zig Ziglar said “ If you aim at nothing, you will hit it every time”
Having a financial goal will change how you look at your money. If you want to set yourself up to be financially secure, the easiest way is to find small sacrifices you can make today. The way you interact habitually with your money today will impact your future. If you don’t plan for your money, you won’t budget and work hard for meeting your financial goals.
For example, if you have not identified your financial goals, it will be no big deal to buy Starbucks via Grab everyday (especially during MCO).
Let’s look at the average cost of lattes.
1 latte – RM 15
5 lattes a week RM RM 75
20 lattes a month RM RM 300
If you put RM 300 a month in an investment asset every month for 5 years, your latte fund could grow in RM 20,000 to fund a vacation or a semester of college because of compounding interest. That’s a semester of A-level private college education you are drinking!
If you put more long term and invested RM 300 a month for 15 years, your latte savings can grow up to over RM 90,000. That translates to a brand new X50 or Honda City or to a downpayment of a house.
If you put RM 300 a month over 25 years your latte money could grow to close to a quarter million Ringgit!
Financial goals include short, medium and long term goals.
Short term can include setting a daily/weekly/monthly budget, saving up for a family vacation or a new iPhone/MacBook, and filling up an emergency fund (at least 6 months worth of financial obligations and basic needs)
Medium term can include paying of your student PTPTN loan, putting in a downpayment for a house, going for Hajj/Umrah, buying a car or funding for kids tertiary education,
Long term is usually focused on retirement.
Once you have identified strong financial goals, it will help change your mindset, habits and your life.
When you are intentional with each Ringgit you have, every Ringgit will stretch and become purposeful. That means you get to do more of the stuff you want to do and plan for it.
How to set a goal?
Ensure it is SPECIFIC
Make it MEASURABLE
Give it a time DEADLINE
Make sure its YOUR GOAL
Commit to the goal in WRITING
Thereafter you budget for it beginning from looking at your daily expenses, including your latte fix!
* illustration was done by my 8.5 year old Miss N