“Setting goals is the first step in turning the invisible into the visible.” – Tony Robbins

At WellsFaber, we understand the power of goal setting in creating a successful financial future. Research has shown that people who set financial goals and plan ahead are more likely to build wealth and feel better about their financial situation than those who don’t.

Financial goals vs. dreams

Dreams and goals both have their place in the financial planning process. Dreams are the initial sparks that inspire us to envision a better financial future, encompassing our aspirations and desires. They act as a starting point to cultivate motivation and engagement, setting the stage for financial success. For instance, dreams of sending your child to a prestigious university or enjoying a comfortable retirement fuel your determination to work towards a more prosperous life.

However, it’s crucial to translate these dreams into actionable and specific financial goals. Goals provide a roadmap and a sense of direction for achieving the financial success you desire. They transform dreams from vague ideas into tangible targets, complete with dates and monetary values, ensuring that you can measure your progress and hold yourself accountable. For example, setting a goal to save R120,000 for a car in four years or to accumulate R2,500,000 by the age of 60 for a part-time work transition makes your financial dreams more attainable.

In essence, dreams give us the inspiration and motivation to pursue financial success, while goals provide a clear, measurable, and actionable plan to make those dreams a reality. By acknowledging and nurturing the relationship between dreams and goals, you can create a comprehensive financial strategy that empowers you to achieve the wealthspace you desire.

How to set financial goals

1. Write it down: When setting financial goals, start by answering the questions who, what, when, where, and why. Begin your goal statement with “I/We,” and state exactly what you want to achieve. Include specific dates and outline what you will do to achieve it (e.g., save R5,000 monthly in a retirement annuity).

2. Calculate your monthly savings: Use a Financial Goal-Setting Worksheet or consult with a financial planner to determine the amount you need to save monthly to reach your goals. Break down your targets into short-term (under 3 years), medium-term (3 to 10 years), and long-term (10 or more years) financial goals.

3. Share your goals: Tell others about your financial goals, so they can hold you accountable. Track your progress and adjust your goals as personal circumstances or economic conditions change.

4. Align your goals with investment decisions: Your financial goals should guide your investment choices. For short-term goals, keep your money liquid and avoid high-risk investments. For long-term goals, consider investments that offer higher average annual returns, such as stocks or equity-based funds.

Remember that goal-setting is a dynamic journey that plays a vital role in shaping your wealthspace. It’s essential to regularly review and adjust your financial goals to ensure they remain in harmony with the ever-changing circumstances of your life. As you navigate personal growth, career transitions, or family milestones, be proactive in adapting your financial objectives to maintain their relevance, attainability, and alignment with your desired wealthspace.

At WellsFaber, we are passionate about helping you achieve a fulfilling life by providing personalised, empathetic advice. Our team of dedicated financial planners is here to guide you through the process of setting and achieving financial goals that align with your unique needs and aspirations. We advise, you thrive.