Setting Goals for 2019

BY: FAZAAD BACCHUS 

So, 2018 is now behind us. For some, it’s a year we would rather forget and for some, it’s a year in history. But I always say that life is like a running river and we can step in the same place twice. In thinking of 2019, we would either be setting goals or making New Year’s resolutions. There are significant differences between the two. Regarding your resolutions, it means that you are resolving yourself to do something. Either a new habit that you plan to cultivate or an old one that you plan to stop, on the other hand, goal setting is quite different.

In respect to New Year’s resolutions, here are some common ones that I see every year. Go to the gym, lose weight, get fit, quit smoking, improve myself, manage my debt, save money, and take a family vacation. These are all resolutions, thing that you resolve to do, but I encourage you to set goals in respect to the things that really matter to you, to be able to accomplish them.

So how is goal setting different then? Goal setting is specific. It requires details and follows the SMART acronym, which is specific, measurable, attainable, realistic and time sensitive. Let’s say that your resolution is to lose weight, if you were to transfer this to a goal, you would now have to say how much weight you plan to lose, whether its attainable, are you being realistic about the amount you plan to lose, how you are going to go about doing it, for example how many days are you going to exercise and which gym are you joining. When you have gone through this exercise you are more likely to achieve your goal than if it remains a resolution.

So now let’s look at some financial goals that you should focus on in 2019.

A simple method for increasing your wealth is to earn more, spend less, save and invest more. Well, it’s a simple method but not easily achievable by all. I would encourage you this year to increase your earning capacity by improving your skill at your job and by perhaps working a little harder. Spending less is something that we do have control over but the urge and ease with which we can spend is a trap, if you can’t control the credit card, cut it up or lock it away. I have three credit cards, but there is one in my pocket, I don’t wish to be tempted to make purchases easily. Do not buy things you don’t need, or eventually, you will have to sell things that you do need.

Save and invest more. What if you had saved 10% of all of your paychecks since you got your first, how much would have saved by now? What if you now add a compound interest of just 5%, can you imagine your savings? In 2019 decide that you will reduce your net income by 10% and save it first before you pay your bills, much different from what you do now; you pay bills and save what’s left over, not good! Where should you save this 10%? There are many financial instruments, perhaps a TFSA or RRSP, you have to ask a financial advisor to guide you.