Goal setting

In the past two blog posts, we dealt with budgeting and risk-profiling – two very important initial steps to take when formulating a financial plan.

Goal setting is the third vital step. During this process, it’s important to figure out what you need and what you want and to prioritize the former over the latter.  Often, the lines are blurred, and clients need to be reminded of the difference.

‘I need that sports car’, a client told me once, some years ago. I had to smile at that statement. The truth is that we all go through this at some point in our lives – when the ‘nice-to-have’s’ become a ‘must-have’. 

My bucket-list is a mixed bag of wants and needs and I’ve been slowly working through it – figuring out what the important, urgent and nice-to-have items are and categorizing them accordingly. The second phase to this is working out the financial implication of each item. An example, I’d like to travel on the Rovos from Cape to Cairo before I die – this one is a clear want and something I can defer until I’ve sorted out some urgent and important matters in my life first. It is accordingly filed under ‘wants’ and the time-line is ‘long-term’. The last time I checked, it was going to cost me R500,000 and a whole month off to traverse the continent. ????

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