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It's the first step to sorting our finances: working out where we want to be moneywise and what our priorities are.
Setting financial goals helps us focus our money and our lives. Goals can be short or long term, small or large, but they all need to be achievable. Many of us tend to underestimate how much we can achieve over time!
The Sorted goal planner can help you organise your short, medium and long-term goals. It will also show you where to go to start working towards them!
If we have high-interest debt, like credit card or hire purchase, the main goal should be to pay that debt off first and as soon as possible. This could involve restructuring the debt into lower-interest loans.
Our guide to getting out of debt can help.
It's a good idea to put money aside for emergencies. Start by saving up $1000 as quickly as you can.
Ideally, over time we should aim to save up the equivalent of three months’ expenses – but every little bit helps when life throws curveballs our way, like big bills on the car, a job loss or unexpected illness.
It’s a good idea to have this fund in a savings account separate from our normal everyday bank account.
The earlier we start saving for retirement the better. Even a small amount saved every week or month can add up to a lot over time.
Check out how compound interest can supercharge your retirement savings over time with the savings calculator.
If we have a mortgage and can afford to increase our repayments, a goal may be to save on interest by paying off the loan faster.
If you don't have a mortgage, but do have a KiwiSaver, bumping up your regular contributions can help you save a deposit for a first home or for your retirement.
Actions are the steps we take to reach our goals. Here are some examples:
In six months or a year, let’s review those goals. And when we achieve a goal, let’s celebrate! Then we can set new ones to work towards.
New Year is a great time to think about goals – write those resolutions down!
Life’s a lot easier when we’re on the same page with our partner about the future. Both partners need to be involved in the process of setting goals and making a financial plan. Our guide to planning in a relationship has some helpful ideas for you to get started together.
Knowing our net worth – the difference between what we own and what we owe – is an important part of setting financial goals and building a financial plan. It’s the way to know whether we’re getting ahead or not. Find out more in our guide to net worth.
