Who should set financial goals? It was another jaw dropping moment when I told attendees at the seminar that anyone over the age of 10 should be setting financial goals. That was exactly what a Jewish boy born into poverty in Clapton, East London did over forty years ago. He obviously wasn’t happy that money was seriously tight at home. He motivated himself and decided to do some odd jobs to give himself a better future. Today, he is known as Lord Alan Sugar and on his CV, you will read that he once sat on the board of a Premier League club, Tottenham HotSpurs. So, whether you’re teacher, lecturer, apprentice or even a director, set some financial goals for yourself straightaway.
The next question you may want to ask is why do we set financial goals? One reason is that we’re living longer. You see, life is like a marathon and if you’re not prepared financially, you might have problems on the home stretch. By that I mean, you might be facing serious money problems – shortage of cash – in the second half of your life. Many people in fifties and sixties know what I’m talking about. At that age in one’s life, working should be on one’s terms, but this is not the reality for a lot of people . And one of the reasons is due to the fact that they never saw the need to set financial goals in the past. And as the opening quote reveals, if you fail to plan, you are planning to fail. That is the reality of many today.
Another reason for setting financial goals is that it gives you a clear idea of what your future will be, money wise. It also helps you know the scope of what you have to do and how you want to go about doing it. Here in the UK, the government has realised that we are living longer and as such, has decided to help workers set financial goals for their later life through the auto enrolment scheme. It’s a scheme for workers to save into a pension scheme, in order to have enough to spend in their old age. This scheme came into operation last year and the reason is because the government realised many weren’t prepared for the marathon called life. It may have it’s disadvantages, but signing into it isn’t bad for beginners.
Without any doubt, one of the many benefits of setting financial goals for the year is to be able to take advantage of opportunities. In Lagos, for instance, the government is getting into social housing and though the numbers of the units to be built might be limited, but why not set yourself a goal of saving for your own house. The wisdom of that is, if you can’t take advantage of what the government is doing now, then you’ll be ready for the next batch.
I was at an event on Sunday night, March 9, where Aso savings and Loans, mone of the leading names in the country’s mortgage industry gave a presentation on home ownership. The bank’s representative revealed that the. Bank will loan money to people – including those in the Diaspora – to build their homes and that the interest is less than the market rates. For me and anyone with money intelligence, that is one great motivation to set financial goals for this year. As a matter of fact, I’ve decided to make opening a savings account – with the aim of later borrowing for a home – a financial goal, after heating that presentation at Piccadilly Circus. Meanwhile, as we sat at that prestigious hotel, I could hear some members of the audience drawing blank and not able to join the dots as per how this correlated with the evening’s function. The bottom line is, taking advantage of opportunities is one good reason to set yourself financial goals for this year. As for me, once I open that account within the next couple of days, I will be putting money into it every single month.
When should you set financial goals? Ideally, it should be at the beginning of the year or at the start of a new month or as I just showed above, set yourself a financial goal when an opportunity opens up.
In conclusion, there are three types of financial goals – short term, medium and long term financial goals. Using the home ownership presentation I mentioned above, the process of using the bank to build a house for me can be divided into three. My short term goal is opening an account and putting something there every month. The medium goal is to do this consistently until I have perhaps twenty per cent deposit that the bank may require. The long term goal is to them borrow and take a mortgage from the bank. In setting yourself financial goals for this year, remember that Rome wad not built in a day.
Tunde Oyedoyin, is a personal finance expert and founder of money Intelligence Coaching Academy.