Setting 'Easy-Peasy' Financial Goals for a better year Written by Shekinah Ade-Gold on behalf of Budget Leaf
Dopamine your goals
The “Endowment Effect” is a phenomenon where we place a lot of emotional value on something that we consider to be ours (one can research the 1998 study of the chocolate bars and the mugs to have an example). Basically, an object or idea that we see as ‘ours’ will get a lot more of our attention and focus, and we will be less inclined to lose or sacrifice it in any circumstance. This is how it works with goals. When we set goals for ourselves, we will want to see them through, and accomplish as much as possible. Our bodies produce a chemical known as ‘dopamine’ that gives us a natural high and rewards us by improving our moods whenever we achieve our desires.
In a financial context, we want to make money. We want to see it grow, be invested wisely, and be put to good use in acquiring or assisting with our many needs and wants. Most importantly, we want to have our money work for us so that when we get to our old age, we will be able to support ourselves and not become burdens to our loved ones. Even the Bible stipulates that we should leave an inheritance for our “children’s children.”
Add Value, earn, save and invest
We can begin by earning more. Saving money in itself can be counterproductive, as the money saved would not be incurring any further value on its own. Investing money is recommended (and it is advised that you seek a financial advisor where this is concerned), but one must also remember that a substantial amount of money has to be invested in order to see profitable returns. The risk of losing our investments also exist. Therefore, we have to look for ways to add value to ourselves, which will increase how much we are able to earn, save and invest. This is how we will shape our goals, which we will then be motivated to achieve.
What do you want to achieve this year?
In order to help with planning your goals, you can decide from early about what you would like to achieve. Do you want a new house? A new car? Would you like go back to school for higher education? Maybe you would like to plan for retirement, or start a fund for your children’s education in the future. You can consider health and life insurance, investing in stocks and bonds, learning a new set of skills, or buying shares in a company that is doing well on the market. You could even be trying to pay your student and bank loans, and could even be thinking of relocating to a new country altogether.
Once you can answer these questions, you can begin to set your goals and feel good about doing so – which will also build your commitment and discipline. Be encouraged to stay tuned to our blog, as we deliver more information to help you make your goals become reality.