By now, you probably have taken a look at your financial goals for last year. Congratulations on the ones you accomplished! No shades, but you must have made some seemingly insignificant bad financial decisions that resulted in your inability to achieve your other goals.
While you scribble down your New Year resolutions, including new financial goals or carryovers, below are basic questions to ask yourself before making financial decisions. And what you don’t want to do in the coming year, is to lie to yourself.
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Is This A Need Or Want?
Before you decide on whether to purchase or pay for whatever product or service, it is important to answer the question of whether it is an essential requirement or a mere desire. Understanding the difference between these two categories is crucial for you to make a better financial decision.
Needs are essentials for living, like food, shelter, clothing, healthcare and education. Meeting needs should come first, for comfort, and is non-negotiable. Wants on the other hand are things we desire but can live without. So, before you get that second car or that really expensive gadget this year, you need to ask ‘
Do I need this for my comfort or am I trying to belong?’ Your answer to this question will assist you in making realistic budgets in order of priority.Â
Identifying the difference between your wants and needs makes you intentional about resource allocation, thereby easing the accomplishment of financial goals in the long run.
 Meeting essential needs forms the foundation for financial stability, demanding immediate attention and practical choices. You need to strike a balance between your needs and wants this year.
Do I Earn Enough to Fund My Goals?
Big goals are amazing. They stretch our minds and thinking. Is it okay to set big goals without having enough to achieve them yet? Yes. Is it okay to not consider these big goals while making the littlest financial decisions? No! You need to start with small habits to achieve big goals. Â
Sincerely answering the ‘do-I-make-enough-to-fund-all-my-goals?’ question keeps you track of how to spend and on what.
If you don’t earn enough to fund your goals yet, you need to be mindful of your spending- no matter how little, invest in financial education by reading books on finances, and do regular reviews and adjustments on your financial habits too.
Your little financial decision accumulates overtime and determines if your financial goal will be met at the end of the year.
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Will This Financial Decision Take Me Farther away from, or Bring Me Closer to Achieving My Financial Goals?
Poor financial choices can lead to delays in achieving your goals. Whether it’s overspending, neglecting to invest, or accumulating debt, these financial decisions can extend the timeline for reaching your objectives.
To evaluate whether a financial decision will take you closer to or farther away from your goals, you need to be sure that it aligns with your goals and values, ensure that your decision is based on informed and educated choices and also consider the risks to be taken and the rewards.
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You don’t want to carry over your financial goals to 2025, again. Or do you? Remember, the last thing you want to do is lie about your financial reality.
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