How to achieve your financial goals

Did you know that when setting a goal for yourself, you are much more likely to be successful in achieving it if you share the goal with family and friends? It has been proved by many researchers that the support you receive from family and friends throughout the process makes achieving the goals you have set yourself much easier.

Related financial surveys like the one from Zurich called ‘Set the Right Goals’ show that people who have set themselves clearly defined goals for when they are aged 65 or over, such as travelling more, taking up new hobbies, or being in a position to financially support children and grandchildren, save 7.25% of their salary into their pension, while those who don’t know what their aspirations are save just 5.36% over the same period.

Furthermore, if an employee with 5-9 years’ experience typically earns £30,708, a “goalless” saver earning at this level would put away just £1,646 per year into their pension, compared with the £2,226 a year for those with set goals. That’s the beneficial effect on achievement of having clearly set goals – certainly food for thought, don’t you think?

I often hear my friends saying, ‘I can’t save as I live from pay day to pay day really’.  But guess what? When I ask them how much they earn and discover more about their daily habits and hitherto unknown aspects of their lifestyle, I’m quickly able to recommend some money saving optimisation which will enable them to save some money. All of a sudden they realise that by just changing a few things around, they can achieve quite a lot.

They have not planned or set themselves proper financial goals, and lacking community support they fail to achieve their resolutions.

Here are the typical issues standing in their way and preventing them from achieving financial security:

1)  Lack of planning

I often hear, ‘I earn too little to save’.  But most people in full time employment, even those on a very poor wage, are able to save. Trust me, I have been earning as little as £13k in the past and have still been able to rent a room and travel abroad occasionally.
Tip for goal setting: plan how much you need to spend on accommodation and if you don’t own a place move close to work to save money on commuting. If that is not possible, if for example you work in central London, move to an area which is still easily commutable but costs less or you can get to by bicycle/motorcycle – if you are up for some fun. 😉
Pro tip: if you don’t mind sharing, find a whole flat and see how much you will make while living there and renting out the remaining rooms. I have a friend who lives in a flat in central London costing £1600 per month and yet he pays as little as £400 for his room including bills. In order to achieve that he lives with two other people, but has the advantage of saving loads on public transport and never having to worry about getting home when it’s late. 🙂

2) Not smelling your own coffee

I often hear, ‘I like to drink quality coffee’. Yeah, we all do. Coffee snobs or not, Millennials are way too fond of coffee chains. Regardless of whether some avoid paying their taxes, they are always full of people.
Tip for goal setting: one coffee per day costs you roughly £3,  which makes £66 per average month of working days, an astonishing £726 per annum (based on a calculation of one month’s annual leave, so 11 months with an average of 22 working days). Even if you drink only one coffee per week, it still amounts to £144 (again, allowing for a month’s annual leave, that’s 48 weeks) and that’s still plenty.  Buying your own coffee and using a cafetiere or coffee machine is much more economical and you will pay back the cost of the coffee machine in the long run.

3)  Not cooking ‘your savings’

Have you been thinking about taking up a hobby which is useful and leads to saving money? e.g. cooking
I often hear, ‘I can’t cook’ or ‘I don’t have time to cook dinner after work’. We can all say, ‘I don’t know how to cook’ as no-one is born with the ability to cook like a masterchef. Like anything else, becoming a good cook comes with time and practice. I like to have fun when cooking, so I find myself finding deals for sites which make cooking both fun and easy, like Gousto.
Pro tip: Order the meals yourself for the first time and then ask your partner to do so as well to use the promo offer twice (you will get £25 off your first order when signed up through my referral link) You don’t have to continue with the subscription once you have tried it for a few weeks and you will have collated a few nice recipes which you can easily replicate later on by buying the ingredients yourself. (Gousto send you recipes together with the exact quantities of ingredients, so all you need to do is follow their instructions).

4) Not shopping smart enough

In order to save money, you don’t have to renounce everything and live like Saint Augustin. Once you have calculated how much money you have available for shopping, ensure you browse online for the item in question and check if you can get cashback on it.
Pro tip: I use Topcashback for every purchase they offer cashback on. My latest cashback includes an impressive £25 on accommodation I booked for my holiday in Cambodia which would have cost me £170, so ultimately its price went down to £145 – which is not bad given that is 3 nights for two people. Also on some sites, you can use vouchers and still get cashback. Check both prior to purchase. You can install the browser extension which will remind you about the cashback when you visit online retailers.

5) Not banking it

If you have been following me for some time you will know how many bank accounts I have and why.  Maximising profit when switching accounts and getting % rates and other benefits makes your money work harder almost effortlessly e.g. free cinema tickets.
Pro tip: work out how much money can be transferred between multiple bank accounts if you were to open a few. Importantly, you don’t have to earn thousands to benefit from these bank account offers. All that’s required is for the money to sit in one account for a few hours or a day before being sent over to another account.

6) Not being curious enough

So, you have the time to spend hours on Facebook, Instagram or Snap Chat, yet you can’t be bothered to find deals on things and services you are addicted to? Where is your curiosity? Wouldn’t it be a good idea for you to explore Google with some queries you haven’t used so far? There are many not-so-obvious ways in which you could be saving money. For example, if you can’t cancel your gym membership, you could lower its cost by getting health insurance from Vitality. OK, you pay for the Vitality membership, but even on a very basic plan there are many perks enabling you to quickly recoup the cost of membership while also allowing you to save more on the gym, for example.

7) Not setting any clear goals

Ultimately, all of the above result from a lack of clearly set goals. If you treat your finances seriously you will plan your outgoings and realise how much money you have left to save.

Do not allow any of the above issues to hinder your goal achievement.