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Checking in With Your 2020 Financial Goals

And just like that, we’ve entered a new financial year, a fantastic opportunity to review the goals we set earlier this year and consider what needs to be adjusted. I’ve written a few pieces now about goal setting, but the circumstances of 2020 have put a different spin on things. We’re dealing with challenges we couldn’t have foreseen 12 months ago, a boatload of uncertainty and a rapidly changing job market. Having said that, I believe that some of the fundamental principles of personal finance are more important than ever at the moment, and there is absolutely still a reason to set financial goals in your life.

Usually, my goal setting steps rotate around the following points:

  • Identify Your Priorities
  • Define Your Goal & Ensure Your Goals are Realistic and Time-Based
  • Create Your Action Plan & Budget
  • Automate, Automate, Automate
  • Create Systems For Accountability & Regular Reviews
  • Learn From Mistakes But Don’t Dwell on the Past

So, how should we approach our finances for the remainder of 2020, given the current global climate?

One thought pattern that has helped me deal with everything thrown my way over the last few months, is considering what I can and can’t control, and focusing of dealing with the matters that fall into the “can control” basket. Sadly there’s so much happening in the world that we can’t control right now, that we need to tune out the noise and focus on what’s in front of us. The excerpt below is from an article by a pro-poker player, and provides a fascinating perspective on chance and making peace with what we can’t control.

“What do we control and what don’t we control, and can make the most of the former while making our peace with the latter. There’s nothing quite like that game of cards to consolidate one central lesson: Chance is just chance. It is neither good nor bad. Without us to supply meaning, it’s simple noise. The cards don’t know or care who you are. They have no concept of fairness. They are just dealt — and we are left to deal with the fallout, to interpret the noise. And so, the most we can do is learn to set aside what we can do nothing about and, instead, focus on controlling what we can.”

Let’s cut out the noise and focus on these three issues for the rest of the year; your safety net, your cash flow and your goals.

Sort Out Your Safety Net

Something that COVID-19 has demonstrated to me, is just how uncertain the future is and the importance of being flexible. One way to deal with this is by building out your financial safety net. Your emergency fund is your financial runway for whenever you run into unexpected trouble, and need to cover some financial costs. It also gives you breathing space between your bills, so you’re not living paycheck to paycheck.

Typically, experts suggest putting away 3–6 months of living expenses to alleviate financial stress and give you a buffer in case of unexpected illness or job loss. Just think of it as your personal parachute, that you can open in case of emergency (and if you do, start repairing it straight away)!

Sort Out Your Cashflow

If you haven’t already, throw your pre-corona budget out the window and put together a system that actually works for you at the moment. So much has changed over the last few months and your past budget may not be working anymore. Take a good look at your current income and where you’re spending your money at the moment, and put together a new plan of attack. Maybe mix up your spending methods by giving a different method a go, like the 50/30/20 method or the pay yourself first approach.

Sort Out Your Goals

I don’t know about you, but my goals are all over the place this year. I started 2020 with such clear intentions about what my year was going to look like, and I’ve had to completely reevaluate. One the buzz words this year has been “pivot” and I believe that’s exactly what we need to do with our finances. Maybe you need to adjust your savings goal for the year back from $10k to $5k or press pause on some of your immediate goals and give yourself a little more time to reach your goals.

Don’t be too hard on yourself if you need to take a step back for a while before you reassess your goals. It’s been a tough year, and it’s more important right now to focus on getting through the immediate future and looking after yourself.

Kate — HTM Founder & Editor

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Our mission is to get young Australians talking about personal finance, and give them the resources to guide them in their financial education journey.