Tunde Oyedoyin is a London-based personal finance coach and founder of Money Intelligence Coaching Academy, a specialist academy of personal finance. He can be reached as follows: +447846089587 (WhatsApp only); E-mail: tu5oyed@gmail.com
When it comes to money matters and personal finance in particular, not only must there be no ambiguity, as mentioned last week, you must set financial goals every single year. That gives you direction for the year ahead.
If you’ve already pencilled down your financial goals, well done; if you’ve not, it’s time to put pen to paper or get your fingers moving on your phone or tablet keypad and straight to business.
For those already with their financial goals, it’s important they meet five criteria in the SMART acronym. In other words, they must be: Specific, Measurable, Achievable, Relevant and Time-bound.
So, whether you’ve drawn up a list of just twelve or twenty financial goals, overall, they must tick those five boxes.
While it is good to say I want to have savings, you must be specific as to the figure you’re aiming for. Better to say I’ll be saying ten thousand or fifteen thousand Naira (N10,000 or N15,000) each month than simply having savings listed. Even if you fall short of that goal in January, you don’t need to beat yourself down.
As a matter of fact, by putting a number on what you intend to put away as savings every month, by being specific with the target, it even meets the second criterion in that it’s measurable.
But guess what? There’s no point saying I’m going to bank thirty thousand Naira ( N30,000) every month if your salary is fifty thousand. Put differently, make sure those goals are achievable. If you’ve always taken a salary advance or you go overdrawn each month by thirty thousand Naira, better target gradually reducing your dependence than aiming to go off in one swoop.
So, if you’ve always been twenty thousand Naira in red all through 2023, it’s better to aim to reduce the level by five thousand beginning from this January. That’s achievable. As the year progresses, you’ll probably figure out how to reduce the monthly debt by seven thousand when we’re in April.
Next thing to look out for when you glance through those financial goals is whether they’re relevant to where you aim to be by the end of this year. Many times when I say to people to have five thousand Naira in savings, it seems laughable. But trust me, not many people can boast of a savings account with a sixty thousand Naira balance as of the end of last year.
In other words, own your financial goals. Make them relevant to where you want to be in December. Know that you’re not in competition with anyone. You may be inspired by what your mates are doing and wearing or where they’re flying to, but you don’t know where they’re heading for by the end of the year.
Lastly, those financial goals must be time-bound. In fact, on the one hand, they would have met this criterion in that you want to achieve them this year. But on the other hand, you probably want to aim for June before you’re able to buy that new dress or buy a government bond. So, as already mentioned, don’t expect to do everything in one swoop.
For instance, you may aim for June as the time you want to be out of the red or when you hope to pay off the balance on that car.
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