Rask - How to set 2025 financial goals, with financial adviser Gemma Mitchell
The discussion focuses on the importance of setting realistic and personal goals rather than following trends or societal expectations. The hosts argue against waiting for the new year to set resolutions, suggesting that goals should be adaptable and aligned with personal values. They emphasize the need for actionable plans and regular reviews to ensure goals remain relevant and achievable. Practical tips include automating savings, creating a buffer for unexpected expenses, and using data to track progress. The conversation also highlights the role of money coaching in bridging the gap between DIY financial management and professional advice, offering personalized support for financial goal setting and habit formation.
Key Points:
- Set goals that align with personal values and are adaptable.
- Avoid waiting for the perfect time; start immediately.
- Use automation to facilitate savings and reduce friction.
- Create a buffer for unexpected expenses to avoid derailing goals.
- Regularly review and adjust goals to ensure they remain relevant.
Details:
1. 📢 Welcome & Important Disclaimer
- The content is limited to General Financial information only.
- Consult a financial planner for personalized advice.
- Refer to the financial services guide for detailed information.
2. 🎙️ New Year, New Me: Setting Goals
- Utilize SMART goals (Specific, Measurable, Achievable, Relevant, Time-bound) to ensure clear and achievable objectives.
- Review past achievements and challenges to inform more effective future goal setting, ensuring continuous improvement.
- Integrate financial goals with broader life aspirations, emphasizing their role in personal development.
- Example: Increasing savings by 20% over the year by setting monthly targets and adjusting expenses.
- Regularly track and reassess goals to remain aligned with evolving priorities and life changes, ensuring adaptability and relevance.
- Example: Adjusting career development plans every quarter to incorporate new skills or opportunities.
3. 🎯 Goal Setting vs. New Year's Resolutions
- Goal setting is more effective than New Year's resolutions, focusing on long-term achievement rather than short-term intentions.
- Effective goal setting involves specific, measurable, achievable, relevant, and time-bound (SMART) criteria.
- Avoid common pitfalls by breaking down large goals into smaller, manageable tasks.
- Increasing accountability by sharing goals publicly can lead to better outcomes, as it creates a sense of responsibility.
- A study found that publicly committing to a goal increases the likelihood of success by 33%.
4. 🤔 The Pitfalls of Waiting for the 'Right Time'
- Avoid waiting for a specific time like New Year's to set goals; reassess and align them at any time.
- Goals should be flexible to adjust when they no longer align with current needs or circumstances.
- The beginning of the year is a popular time for goal setting due to its symbolic fresh start, but not the only time to initiate changes.
- Implement a quarterly review process to assess and realign goals according to progress and changing circumstances.
- Use tools like SWOT analysis to evaluate the relevance and feasibility of current goals regularly.
- Encourage setting both short-term and long-term goals to maintain motivation and adaptability.
- Create a habit of reflecting on personal growth and achievements monthly to ensure continuous alignment with personal values and objectives.
5. 🌟 Embracing Imperfection to Progress
- Perfection is the enemy of progress, as waiting for ideal conditions can prevent action.
- People commonly delay goals like buying a house or starting investments, waiting for a 'perfect' time.
- Starting new routines or investments should not be postponed due to perceived timing issues.
- Initiating action, even imperfectly, can lead to more clarity and success over time.
6. 📈 Personal Insights on Goal Achievements
- New Year's resolutions often fail because they rely on a sudden, unrealistic change in discipline from January 1st.
- The effectiveness of goal achievement is increased by setting specific behaviors and routines rather than relying on resolutions as a 'magic bullet.'
- Routine-based approaches have been more sustainable over a decade, compared to short-term resolutions.
- Establishing a routine, such as dedicating 30 minutes daily to a new skill, has shown a 50% higher success rate in long-term goal achievement than sporadic attempts.
- Examples of effective routines include setting a fixed time for exercise or learning, which can lead to more consistent progress and fulfillment of goals.
7. 👩🏫 Meet Jemma: From Financial Advice to Money Coaching
- Jemma initially worked in the financial advice industry, where she provided personalized advice but faced significant burnout due to the demanding nature of the job.
- Her experience in financial advising highlighted the need for more accessible financial education, prompting her to shift towards money coaching.
- As a money coach, Jemma focuses on financial literacy through podcasts and workshops, allowing her to reach a broader audience and engage in educational activities she is passionate about.
- Despite enjoying her role in education, she remains open to returning to financial advising, especially where she can incorporate educational elements.
- Jemma's transition was driven by a desire to alleviate the pressures of direct advising while still contributing to the financial well-being of others through education.
8. 💡 Common Financial Goals & Overcoming Barriers
- Money coaching addresses foundational financial issues not typically covered by traditional financial advice, such as goal setting, habits, money mindset, and budgeting.
- It bridges the gap between DIY financial management and professional advisory services, offering a personalized approach to financial improvement.
- Coaches like Karen and Lexi provide varied perspectives and strategies, helping clients tailor solutions to their unique financial situations.
- Common financial goals include saving for retirement, buying a home, and paying off debt, while barriers may involve lack of financial literacy, emotional spending, or unexpected expenses.
- Money coaching focuses on alleviating financial stress by helping individuals identify and overcome what keeps them up at night financially.
9. 💸 Managing Spending and Financial Stress
- Financial stress often arises from holiday and gift expenses or inadequate income, highlighting the need for financial planning.
- Key financial goals include debt reduction, saving for holidays, or accumulating a home deposit, with retirement planning focusing on financial independence and home ownership.
- Setting smaller, achievable goals such as saving for unexpected expenses can provide relief, as many people feel overwhelmed without significant ambitions.
- An example of unexpected expenses includes a vet visit, initially costing $280, which escalated to $1,215 due to unforeseen treatments, emphasizing the importance of having an emergency fund.
- Strategies to manage financial stress include budgeting, setting clear financial priorities, and building an emergency fund to handle unexpected costs without panic.
10. 🛣️ Exploring Alternative Paths to Goals
- Recognize recurring events like Christmas as predictable expenses and plan ahead to avoid stress. Set a budget early in the year to manage holiday expenses effectively, spreading costs over 12 months to reduce financial strain.
- Set realistic goals that align with personal circumstances. For instance, planning for holiday expenses should consider individual financial situations and potential income changes throughout the year.
- Explore alternative ways to achieve goals, such as considering sharing responsibilities or outsourcing tasks to save time and resources. Instead of focusing on a single approach, evaluate multiple paths to fulfill needs.
- Consider adjusting timelines and strategies based on the time of year and available resources. For example, if a goal seems unreachable within the original timeline, extend the deadline or adjust the strategy to achieve better outcomes.
- Incorporate flexibility into planning by regularly reviewing goals and progress. This allows for timely adjustments and prevents stress caused by rigid plans.
11. 🚤 Real-Life Adjustments to Financial Goals
- Test long-term travel plans in short bursts to determine personal comfort and enjoyment levels.
- Consider renting a caravan multiple times before purchasing to assess suitability and usage frequency.
- Evaluate the cost-effectiveness and convenience of renting versus owning for infrequent use items like caravans.
- Reassess financial goals that are based on anticipated feelings of ownership, considering alternative ways to achieve the same satisfaction.
- Anecdotal evidence from boat ownership suggests the excitement of purchase can be short-lived; reassess such goals critically.
12. 💭 Reevaluating Financial Assets
- Owning a boat is often perceived as a 'lifestyle asset' but can lead to unexpected costs, such as maintenance fees, without adding significant value to one's life.
- Consider alternative ways to enjoy desired experiences, like borrowing from friends or renting, instead of purchasing expensive assets that can hinder other financial goals.
- Evaluate what features or aspects of a desired asset are truly needed, and explore rental services for occasional use instead of full ownership, which can be financially burdensome.
- Adjust financial planning to allocate resources for occasional experiences instead of permanent ownership, which may interfere with achieving broader financial objectives.
- Owning lifestyle assets often incurs hidden costs such as storage and insurance, which may not be immediately apparent.
- Renting or sharing such assets can provide flexibility and savings, allowing for investment in other important areas, such as retirement or education.
- Many people overlook the total cost of ownership, including depreciation, which can significantly impact long-term financial health.
13. 💡 Why Some Goals Fail
- Goals often fail because they are not truly aligned with personal values or desires; individuals may pursue goals based on societal expectations rather than personal significance. To counter this, it is crucial to evaluate how a goal aligns with one's core values and life vision before committing to it.
- The failure of a goal can lead to negative self-talk and a perception of being 'bad with money,' which can impact overall life satisfaction. This emphasizes the need for realistic and personally meaningful goals to prevent discouragement and maintain motivation.
- Successful goal setting requires clarity on why the goal is important and how achieving it will feel, ensuring it aligns with one's life vision. This involves a reflective process that includes visualizing the outcomes and benefits of achieving the goal.
- Alternative methods, such as renting instead of buying, may offer a cost-effective approach to achieving the same outcome, highlighting the importance of considering all options. For example, choosing to rent a vacation home instead of buying one can fulfill the desire for occasional retreats without the financial burden of ownership.
14. 📉 Setting Realistic and Achievable Goals
- Setting financial goals that are too high, such as saving $500 weekly but needing to withdraw $200 regularly, indicates the need to adjust goals to prevent financial strain.
- Transitioning from no budget to a highly structured one can cause issues with unforeseen expenses like car registration or emergency travel. Building an emergency fund is crucial to handle these expenses without derailing your budget.
- A client example: repeatedly saving $5,000 but facing expenses that deplete savings, leading to potential abandonment of saving efforts. This highlights the importance of realistic goal setting and contingency planning.
15. 🛡️ Safeguarding Your Financial Plans
- Establish an emergency fund to prevent financial derailment; balance savings towards both goals and emergency funds to ensure stability.
- Adopt a mindset shift by setting higher savings targets to overcome limiting beliefs; for instance, aim for $7,000 instead of $5,000 to motivate higher savings.
- Implement a protective system for financial plans, similar to guarding a slightly damaged phone, to avoid being derailed by unexpected events.
- After encountering minor setbacks, reassess financial goals and continue pursuing them without delay instead of abandoning them.
16. 🧠 Leveraging Automation for Success
- Implement automation to streamline processes and eliminate obstacles in reaching your goals, such as setting up automated recurring transfers for savings to ensure consistent progress.
- Automate beneficial actions to foster regularity and success in your pursuits. For instance, use calendar reminders or task management apps to stay on track with your objectives.
- Introduce deliberate friction for undesirable actions to discourage them, such as setting up website blockers for distracting sites during work hours.
- Consider using tools like budgeting apps that automatically categorize expenses, helping you to maintain financial health and meet savings goals.
- Utilize automation to send personalized messages or follow-ups to clients, enhancing customer engagement without additional effort.
17. 🔄 Building Habits to Support Goals
17.1. Financial Habits
17.2. Health Habits
18. 🛠️ Steps to Effective Goal Setting
- Reflect on past behaviors to identify patterns that might lead to failure. For example, if you frequently fail at maintaining a resolution like avoiding chocolate, analyze the triggers and patterns involved.
- For complex issues such as gambling or addiction, avoid simplistic advice. Instead, focus on taking small, manageable steps that increase awareness and seek professional support if needed, such as consulting a coach or counselor.
- Celebrate past achievements to boost motivation. Identify what you are proud of, which helps in recognizing your strengths and superpowers that can be leveraged moving forward.
- Reflection is essential in goal setting as it aids in understanding past behaviors, identifying achievements, and setting a foundation for future goals. Incorporate a routine of regular self-assessment to adjust strategies as needed.
19. 🌈 Utilizing Vision Boards for Motivation
- Identify and understand personal values before setting goals to grasp the underlying motivations, such as aiming for security when desiring home ownership.
- Emotionally connect with goals to increase commitment. Use reflection to align goals with personal values.
- Employ SMART goals or personalized methods (like spreadsheets or writing on mirrors) to set effective objectives.
- Vision boards serve as visual reminders of goals; break down goals into actionable steps (e.g., financial milestones or regular check-ins) for better achievement.
- Maintain a long-term vision board to track significant milestones over decades, as demonstrated by the achievement of a major personal vision this year.
- Create and maintain a vision board by gathering materials like magazines, photos, and quotes that resonate with goals. Update it regularly to reflect progress.
- Include examples of successful vision boards to inspire and provide practical insights, enhancing motivation.
20. 🚀 Achieving and Revising Long-Term Goals
20.1. Key Strategies for Setting and Achieving Long-Term Goals
20.2. Overcoming Challenges in Achieving Long-Term Goals
21. 🔍 Example: Planning for a Big Trip
21.1. Reflecting on Past and Setting Future Goals
21.2. Example: Budgeting for a Trip
22. 🔄 Automating and Diversifying Goal Strategies
22.1. Automated Savings for Goals
22.2. Adjusting Goals Based on Budget
22.3. Positive Feedback Loop
22.4. Diverse Saving Strategies
23. 📊 Importance of Data in Goal Tracking
- Utilizing data is essential for making informed decisions in both personal and business contexts. For example, tracking dietary intake using apps can help in identifying areas for improvement, such as the diversity of food consumed.
- Consistent data tracking over time can reveal patterns of good and bad months, helping in assessing progress and making necessary adjustments.
- Regularly engaging with data tracking tools can transform the process into a habit, ensuring continuity even during challenging times.
- Finding a personalized method to measure progress is crucial, as it increases the likelihood of sticking to goals and achieving a sense of satisfaction and accomplishment.
24. 🌱 Setting Personal and Realistic Goals
- Start by setting achievable goals such as paying off a credit card or ensuring timely bill payments, which can significantly improve financial stability.
- Understand that financial goals can be simple and do not need to be grand; starting with daily habits can lead to long-term success.
- If life challenges prevent immediate goal setting, remember that financial planning will help achieve future priorities.
- Use strategies like breaking down larger goals into smaller tasks to maintain motivation and track progress effectively.
- Consider using budgeting tools to help manage and visualize financial goals and progress.
25. 📈 Benchmarking and Evolving Goals
- Savings goals should be personalized and achievable, starting even at 1% or 2% of income, to encourage progress and motivation.
- Feedback from users, including single moms, indicates that understanding small, achievable savings goals can significantly boost confidence and participation.
- Traditional savings benchmarks like saving 20% of income can be discouraging; instead, focus on incremental improvements based on personal circumstances.
- Financial goals evolve over time due to factors like inflation and lifestyle changes, necessitating regular reassessment to ensure they remain relevant.
- The concept of success and benchmarks should be flexible, aligning with personal growth and changing life goals rather than static targets.
26. 🎉 Planning Future Milestones
26.1. Financial Goal Adjustment and Resource Utilization
26.2. Personal Milestones and Motivation
27. 🏡 Innovative Personal Future Planning
27.1. Planning a 40th Birthday Trip
27.2. Home Office Development
28. 🎯 Exploring Multiple Goal Achievement Avenues
- Consider unconventional, low-cost options for achieving goals, such as using small co-working spaces or inexpensive office locations, to maintain financial balance while reaching objectives.
- Evaluate all possible avenues to achieve a goal and remain open to adapting plans if the initial approach doesn't work out.
- Ensure that goals are flexible; if circumstances change or a goal doesn't work, it should be adaptable to serve other purposes, like using a space for family events or guest accommodation.
- Budget for potential cost increases over time, as initial estimates might inflate, and plan for multi-purpose use of resources.
- Encourage community feedback and learning from others' experiences in achieving similar goals through different methods.
29. 👋 Conclusion and Farewell Message
- Encourage audience to like and subscribe for daily content on business finance and investing.
- Briefly summarize key points discussed in the video for reinforcing viewer retention and understanding.
- Highlight the importance of audience engagement for channel growth and content improvement.