Clark Wealth Management Group - ScotiaMcLeod Fredericton

Do you know the power of having a plan? To find out why you should want to have goals and a plan, we’re going to look at the psychology of goal setting.

According to research done on this subject, people who set goals are success oriented. They are more highly motivated to accomplish their goals than people who simply wait for future events to unfold. They are also better at dealing with obstacles along the way because they’re focused on the future instead of the present. They have more control and structure in their life and as a result are more self-assured. By setting goals and making plans people develop a better understanding of who they are and what their priorities are. Life becomes more purposeful and they experience joy as they see progress made toward their important goals.

The clearer and more specific the goal, the more likely it is to happen. For example let’s assume that the goal is to have a flower garden in your yard. Who is more likely to get the job done? The person who says, “someday I want to have a flower garden”. Or is it the person who knows where in their yard the garden is to go, what flowers they will plant, what weekend they’re going to do it and how much it will cost them.

The good news is that anyone can become a goal oriented person. It doesn’t happen without some effort and ongoing focus though. It’s a little like getting physically fit. You have to start the activity then you have to continue it. Thankfully, setting goals and revisiting them regularly to mark progress is not as tough as getting to the gym everyday!

Now that you know why you should want to set goals and make plans, let’s look at some financial goals you may want to set for yourself. When you identify your priorities and financial goals, it makes sense to only look a few years ahead. Five years is about right for most people. There are certainly some longer term goals such as retirement, but working with manageable size commitments and time periods are important contributors to your ultimate success.

• Pay off your debt more quickly than it’s scheduled to be paid in full. Why not increase your monthly loan or mortgage payment by ten percent right away? If it goes well perhaps you can increase it again in another few months.
• Save a twenty percent down payment for your next car purchase so when the time comes you can borrow less money.
• Set aside ten percent of your income this year for your retirement savings fund. The benefit of starting early to save for retirement can’t be overstated.
• More effectively manage your investments to achieve a higher rate of return while not exposing yourself to unwanted risks.
• Reduce (legally) the amount of tax you pay on investment income by earning more dividends and capital gains and less interest income.
• Teach your children or grandchildren how to effectively handle their own money. This could be one of the most valuable gifts you can ever give to a child.

Whether it’s gardening, family planning, or finance, planning is certainly a more effective way to reach your potential than doing nothing different and hoping things will work out for you.

When you find things that are important to you, set some specific goals and then make a plan to achieve your goals. You’ll be amazed how well it can turn out for you.

Keir Clark, is an Associate Director, Wealth Management and senior wealth advisor, with Clark Wealth Management Group and branch manager at ScotiaMcLeod in Fredericton, NB. He can be reached online at www.keirclark.ca or by telephone at 506-450-6465.

Information and opinions contained herein have been compiled from sources believed reliable but no representation or warranty, expressed or implied, is made as to the accuracy or completeness.