I’ve mentioned before how losing weight is similar to saving money. Before I went on my weight loss journey I had to ask myself why it was I wanted to lose weight. Was it to get healthier? To fit into my clothes better? To feel more confident? To live longer? It wasn’t until I considered the reason for losing weight that I had any chance of success.
As I got on a food and exercise plan, I often reflected on the reasons why I wanted to lose weight. It helped during the days I didn’t feel like getting up to run or wanted to eat a second helping of a favourite food.
I was tired of feeling tired all the time. I was tired of carrying around extra body weight and being out of breath running up the stairs. I was tired of feeling exhuasted by nine o’clock at night. When I reallly thought about it, I realized I wanted to lose weight to have more energy. Once I knew why, the journey was a whole lot easier. When the going got tough, I knew there was a reason I was working so hard.
For those of us with financial goals, we need to understand the reason behind our goal if we hope to have the stamina to reach our destination. Why do you want to reach your financial goal? Is it to buy things that are important to you? To have enough to last until your old age? To leave a substantial amount of money for your children or favourite charity? To retire early? To buy a cottage, a boat and a Lamborghini? Or is it simply for the purpose of setting and reaching a goal?
There are no right or wrong answers. What matters is that you know your reason why. When you know the purpose behind your financial goals, reaching them is a whole lot easier.
You may be surprised at your own answers. I was.
Get out a piece of paper or open a document file. Print at the top:
My financial goal is ___________________.
These are the reasons I want to reach my goal…
Write as much as you can. Once you finish, read over your list and identify any themes
Here is my list.
My financial goal is ___________ in cash and investments by age 60.
Why do I want to reach this goal?
- I don’t have a pension.
- I don’t want my kids supporting me.
- I don’t want to have to depend on others to financially support me.
- I don’t want to worry about money / paying the bills.
- I want to be able to travel.
- I want to have enough to last until I die.
- I don’t want to lose my house.
- I’d like to buy a cottage on the water.
- I fear ending up on the streets.
- I don’t want to have to use the food bank.
- I want to have the freedom to make choices.
When I reflected on my list, I realized the purpose behind my financial goal boiled down to security. Having money makes me feel secure. For me, knowing that security is the ultimate goal helps me to make smaller financial choices along the way. I avoid debt. I don’t have any leveraged loans or lines of credit. We pay off the credit card in full every month. We pay cash for cars.
My spouse and I have a good amount of life insurance and disability insurance. We have a healthy emergency fund. We have a balanced couch potato portfolio, invest monthly and automatically. In truth, it’s quite boring. Yet it gives me a great deal of peace of mind and comfort knowing that with each financial decision I make, I’m becoming more financially secure.
What are the real reasons behind your financial goals?
Kathryn works in public relations and training for a non profit. In her off hours, she volunteers as a financial coach helping ordinary Canadians with the basics of money management. Her passions include personal finance and adult education. Kathryn, along with her husband and two children live in Ontario.