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How to ace your personal finance goals in 2021
Ngooi Zhi Cheng
07 Jan 2021
Student Ambassador 2020/21 at Seedly
Happy New Year to everyone!
And welcome to a brand-new year. (Thank God we're through with 2020)
It's a time of the year where we would like to form the proper resolutions for the remaining year, and that we all are in a situation where we start out all motivated.
Then you realize that it's July and nothing has happened.
So you tell yourself: "OH it's too late. I'm not getting to make it happen.” then you tell yourself: “OK, I'll do it in 2022.”
LOL
So, in my many attempts of creating goals, trying and failing and not really getting anywhere, I noticed that the common problems that tend to occur are:
that they're too vague,
that there's no decision to get there,
and that it's not a powerful goal.
And so today, I'm getting to be sharing with you my personal experiences.
1. Vague Goals
So, assuming a couple of years back, you asked me what I wanted to become.
I would have told you my wish would be to become rich. (A little vague right?) While it's an honest goal, it can be easily improved by just adding a couple of more questions.
So how rich?
How does one shall get there, or why is it specifically that amount? So, as you'll see, if you do not solve the issue of a vague goal, it's impossible to unravel the other two problems.
How much you would like to start out investing?
How much does one want to invest? And if you would like to spend less where, wherein your current budget can you cut those spending? And if you discover yourself setting a grand, ambitious goal for 2021, it's great. But if it's too big and too daunting, attempt to make it more manageable by setting smaller checkpoints so that you'll achieve milestones along the way.
For example, say you would like to be a millionaire. you would like that $1,000,000. But depending on where you're starting, it might be a really big goal. So although it's specific, it isn't really that useful.
So, by making actionable steps and concluding that you simply want to be a millionaire in 20 years? That means $50,000 or more savings during a year. To achieve that in 20 years. But that's still quite a lot of cash to save lots of per annum for an average person, right? But guess what?
You're smarter than the typical person, so it's extremely likely that you simply won't just be saving, but you will be investing also to realize that number.
And through the facility of compounding, albeit you started at 0 today, you simply need $25,000 saved and invested growing at 7% a year to realize that $1,000,000 by 20 years. That's half what you'd have originally needed just by raw savings alone.
My point is, having that big hairy, audacious goal is perfectly fine.
They often say the simplest way to eat an elephant is to break it down into bite sized pieces.
With regards to planning, some people call it an idea, but I like better to consider it as a system where there are multiple things working together to assist you accomplish the goal. So here are some suggestions of how you'll build a system for yourself to realize those goals.
2. No Plans
Ask yourself what are the daily habits that you can create to assist you to get there. Habits are great because once you get through that hurdle of forming them, it helps you achieve those goals easier. For instance, maybe it is a daily habit of creating your own coffee rather than going out and buying it all the time.
Or maybe it's just waking up a touch bit earlier so that you'll catch public transport rather than trying to catch a cab.
Can you make it more efficient by having an inventory of specific action steps task to helping you accomplish that goal, but it becomes tricky once you've got too many of them. It's difficult to stay track of them, so one interesting technique which I learned from an author called James Clear is named Habit Stacking.
When it comes to building new habits, you can use the connectedness of behavior to your advantage. Amongst which the simplest ways to create a replacement habit is to spot a current habit you already do every day then stack your new behavior on top.
3. Not a Strong Goal
And there's one thing I realize is that with big goals, it's never easy. And when things get difficult, if the goal itself isn't motivating, it's not powerful enough for you. You're just getting to hand over. It's simply asking yourself why. Why do i would like this goal so badly?
When you tell yourself that answer and you are feeling meh.
Guess what the effort you're getting to put in is probably going very meh also .
But besides that one big question, there are literally other tactics that you simply can use also to introduce a touch bit more energy and motivation, for example:
You could use a motivation system and reward yourself along the way. It might be inspiration from stories of people who have accomplished the goals that you simply want. You can build your own Avengers team, find the proper allies and other people that you simply feel inspired you.
So these are some suggestions on the way to refine your New Year resolutions. What about you? What are you getting to achieve in 2021 and what are the systems that you are going to make to assist you in accomplishing these milestones? Do speak to me about it!
You can slide into my DMs here.
Or connect with my Linkedin here.
Talk more,
Ngooi
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ABOUT ME
Ngooi Zhi Cheng
07 Jan 2021
Student Ambassador 2020/21 at Seedly
To empower people to make informed personal financial decisions for each life stage. Financial Consultant|NTU Accountancy|Dancer
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