Paying off your loans, opening a term deposit, saving for an emergency: these are all financially responsible things to do, and that's great. However, they don't work well as goals unless you can make them personal. When setting your money goals, ask one important question: why? Photo by Wade M.
Over at 20SomethingFinance, writer G.E. Miller makes a good point:
I think this is an all too increasingly common practice in our modern culture. We hear that something is beneficial, so we want to go out and mimic it, without much thought as to why. Or, at best, the why is a secondary consideration...The biggest downside to a missing "why", is it leaves very little internal motivation to see our goal through to completion. We are going to run into challenges, and if we don't, the goal was probably too easy to begin with. In those challenging times, the "why" is what is going to keep us motivated, help us dig deep down, and push us to reach new heights. It helps us refocus.
I can relate. After paying off my student loans, my new financial goal was to just start saving money. It seemed like the right thing to do, but I didn't really know why I was doing it, other than it's what personal finance said I should do. The result? I didn't save all that much, because I didn't have a purpose that mattered to me. Eventually, I did have an answer to "why": because I wanted to travel. This answer gave me the motivation to live below my means and save a lot more of my money.
Miller recommends working backwards. When you want to get your finances in order, "start with the "why" and end with the financial goal". As he says, this is more meaningful and works better. Check out the rest of his post at the link below.
All Successful Financial Goals Should Start with This [20SomethingFinance]