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How to live the life you want

Hitting your every precious goal

By: Nicole Pedersen-McKinnon

Forgive me; I’m going to be a little confrontational…. How much money have you earned in your life so far? Do a rough calculation based on your average salary and for how many years you’ve been earning it.

What do you have to show for all that money? And probably more importantly: are you happy with your financial lot in life?

I believe that any one of us is capable of spending any amount of money – isn’t it funny how those pay rises that seem so large initially, quickly get subsumed by our growing expenses.

The thing is, you need strong motivation to resist instant gratification. We all do. And micro-spending – or frittering our money on the small, inconsequential stuff – can do maximum damage to your financial comfort.

So what does financial comfort look like to you?

I’ll give you a clue: it starts with six months’ salary in the bank or what I call a Holy Sh*t fund, for when sh*t happens (and it will). It ends with a fully paid off roof over your head at least by the time you retire and enough money to enjoy life when you stop earning (thank goodness we have a compulsory long-term saving scheme, super, to at least get us started).

But in the middle of those smart goals should be an awful lot of fun. Because life isn’t about money… it's about the options, opportunity and freedom it brings.

Your goals

What is it that you want your money to do for you over the short, medium and long term? You need to set goals that are specific and terrific… personal ambitions for the future that make foregoing some things in the present seem completely manageable.

For example, perhaps you would love a month in Europe in two years, a week in the Hunter Valley before that and there’s a couch that desperately needs replacing (not to mention the insufficient Holy Sh*t fund).

Beyond this, you might be striving for a house deposit – is five years manageable? Or perhaps your family is targeting spending a year driving around Australia at about that time. The car might be about to conk it then too.

Looking long term, would you like to be mortgage-free not by the time you retire, but by age 50? Come to think of it, maybe you’d like to retire at 50 too.

Grab your partner if you have one and dream about what your future looks like… next we will set about getting it.

Your success plan

Living your ideal life is not just about setting goals, but costing them and determining precisely when you could hit each fabulous one.

Here are the easy templates to do just that. After filling in your goals and dream date, simply figure out how much money you’ll need and how many pays there are until your targeted time. Dividing the first by the second will tell you how much money you need to allocate from every pay. If it all totals too much, think about which goals you want to prioritise so you hit them first.

Short-term goals (1-5 years)

Information is intended to be of a general nature only and any advice has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Disclosure Statement or Product Information Document before making any decisions about whether to acquire a product