BBB #4: Why 'More' Isn't Always Better to Simplify Your Financial Goals

I have a confession to make.

I am the first generation entrepreneur in our family. There are times when I feel like my family just won’t “get” it, especially during times when my emotions and stress are a roller coaster ride.

Then, I found myself surrounded by a growing network of freelancers, agency owners and entrepreneurs. I realized that I am not alone.

Finally, I found people who “get” what I am also going through in business.

However, there’s a caveat to this.

Being surrounded by a network of A-players, go-getters, do-it-or-go-home people, it’s very easy to feel like I am missing out a lot in life.

Enter, FOMO or the fear of missing out.

I guess, it’s very critical that every entrepreneur must learn how to manage his own financial goals, despite being surrounded by a million dollar network.

In today’s newsletter issue, I am here to tell you why “more” is not always better, especially when you are simplifying your financial goals.

Why set financial goals

Setting clear financial goals is crucial for new entrepreneurs looking to take their businesses to the next level.

Well-defined and simple goals provide direction, motivation, and a roadmap for making informed decisions about money. Here's a deep dive into each aspect of setting effective financial goals:

Be specific on what you want

Vague goals that lack clarity makes it so challenging to measure progress and know when you've achieved them. To make your financial goals specific:

• How much? - Clearly state the exact amount you want to achieve. Instead of saying, "I want to save money," specify, "I want to save Php 100,000."

• By when? - Define a specific time period within which you want to achieve the goal. For example, "I want to save Php 100,000 within the next 12 months."

• Why? - Understand the purpose behind your goal. Knowing why you want to achieve it can provide extra motivation and focus.

Which comes first?

Entrepreneurs like us often have so many financial aspirations. And it is good.

However, it can also be a bad thing when we fail to realize that not everything is a priority at a certain time.

That’s why it's essential to prioritize goals effectively.

Divide your goals into short-term, medium-term, and long-term objectives:

• Short-Term Goals - These are goals you aim to achieve within the next few months to a year. Examples include paying off high-interest loans, building an emergency fund, or funding a short vacation to your dream destination.

• Medium-Term Goals - These objectives typically span 1 to 5 years and may include saving for a down payment on a real estate property, expanding your business, or launching a new product.

• Long-Term Goals - Long-term goals cover 5 years or more. These could involve building a retirement fund, achieving financial independence, or creating a legacy for your business.

By categorizing your goals based on timeframes, you can allocate resources and efforts effectively.

Aim for the moon but look at the stars too

While it's essential to set ambitious goals, they must also be attainable given your current financial situation and resources.

Setting overly challenging goals may lead to frustration and demotivation. Here are some tips that personally worked for me:

• Evaluate your finances standing - Assess your current income, expenses, and debt levels. Realistic financial goals take into account your existing financial obligations and capacity to save or invest.

• Break it down - If a big goal seems unattainable at first, break it down into smaller, manageable milestones. Achieving these milestones will keep you motivated on your journey to the larger objective.

• Consider growth as progress - As an entrepreneur, consider the expected growth of your business and income. This perspective can influence the feasibility of certain long-term financial goals.

Deadlines put urgency

Timeframes or deadlines are critical to keep yourself accountable and on track.

Without deadlines, goals may lack a sense of urgency, leading to procrastination or a lack of progress. When setting timeframes:

• Be realistic - Consider the complexity of the goal and the effort required to achieve it. Set a timeline that strikes a balance between challenging and achievable.

• Divide and conquer - For long-term goals, establish intermediate milestones to celebrate progress and keep yourself motivated.

• Review and adjust - If you find yourself struggling to meet a particular deadline, reevaluate and adjust it as necessary. Flexibility is essential, especially if external circumstances change.

Dreams are not static

Financial goals are not set in stone. They are not static or to be seen as absolutes.

Regularly reviewing your progress is crucial to stay on track and adapt to changing circumstances. Consider these habits:

• Schedule periodic reviews - Set aside time, monthly or quarterly, to assess your progress toward your financial goals.

• Track your performance - Maintain a record of your financial achievements and setbacks. Use tools like spreadsheets or financial apps to monitor your progress.

• Embrace flexibility - Life and business dynamics are constantly changing. Be open to adjusting your goals when needed, without feeling discouraged.

• Celebrate wins no matter how small - Acknowledge and celebrate achievements, even if they are small. This positive reinforcement can strengthen your commitment to your financial goals.

In conclusion, setting financial goals does not have to be complicated.

Remember, simplicity wins the long game, especially when it comes to money.