Have you ever pondered the reasons behind why some individuals appear to make the most of their money while others do not? The amount of money you put away or the amount of money that you have in your bank account are not important.
What is the true game-changer? Having a clear understanding of the purpose of your savings. Your money is just sitting there, doing nothing for you, if you do not have a goal to direct it toward.
Let us dissect it in detail. Think about the things that you truly desire:
- Thailand, with its stunning beaches and lively culture, is the perfect destination for that fantasy vacation.
- A warm and inviting second house overlooking the sea, where you can get away whenever you feel like it.
- It’s also possible that you want to cover the cost of your child’s education so that they may get off to the best possible start in life without having to worry about money.
It’s not just that they are wonderful concepts. Your reality may consist of them. The catch is that merely stating, “I want to live my life on my own terms” is not enough to describe what you want to do. That is not specific enough and will not help you stay on track.
What is the key? Create a list of specific objectives to achieve your desires. Contemplate the goals that you have set for yourself for the coming year, the following five years, or even thirty years from now. You will find that your route becomes more transparent as you become more detailed. You might think of it as having a road map for your finances that points you in the right direction at every turn.
So, what is your one and only dream? Moreover, what are the particular objectives that you need to establish in order to get at your destination? Always keep in mind that the first step toward achieving those significant goals is to have a clear idea of what it is that you want and to plan out how you will get there step by step.
Follow Luca Caruana’s weekly column here, and his LinkedIn account or his Instagram for more budgeting hacks. For other money-related columns, check out Luca’s thoughts about how to make the one-income household work and his advice to couples who argue about money.
