The Vault with Financielle - UNLOCKED: How to Set Money Goals You Will REACH!

Starting point is 00:00:00 Welcome to The Vault Unlocked, where I take a deep dive into the big money topics that no one wants to talk about. Actually, I'm lying this week because I am talking about something that everyone has got something to say about it. It is goals, goal setting, plans for the new year, ambitions, and it is everywhere on social. I don't know about you, but I have seen every single possible content creator or company talking about this new year, new me, reinvent yourself. I think in years gone by, I've definitely leaned into that. And I'm not a new year's resolution person, but I feel like January is a great time for that reset and that detox. If you have been indulging, if for that reset and that detox if you have been indulging and if you have been going out if you have been you know it's been crazy and this this

Starting point is 00:00:50 time that's just passed between Christmas and New Year's for lots of people can be a really good time for reflection and for this desire to have a reset and the social media pages are just full of people reinventing themselves I keep seeing these lists like I'm going to walk 10,000 steps a day. I'm going to drink three liters of water, et cetera, et cetera, like much bigger things than that. And I think on the one side, I want to de-influence you a little bit from that and that pressure, especially if you find pressure. But on the plus side, I do want you to take this opportunity to think about goals. And obviously our job here is to help you with money goals um so we're going to lean into that in in this topic um but i hope you had a great festive period and festive season and a really good new year's and for those of you that

Starting point is 00:01:37 it's a difficult time for i hope you navigated it as best you could um this episode's for everyone to think about a reset you could be thinking picking this up in may in fact september's a massive time to do resets um so i'm going to be sharing a few little personal stories along the way and it's not gonna be super long this one there's gonna be actionable stuff that you can maybe re-watch later um but yeah just settle in lean back and allow yourself to dream a little bit. Now, money goals matter because, you know, if you don't make a plan for things, life just happens. And so, and that's good for some things, by the way, it's a nice, you know, a flow state, it's a lovely state to be in. But when it comes

Starting point is 00:02:18 to things like, I'd like to be debt free, I'd like to own a home one day. I'd like to make sure that I've got enough money in retirement to sustain my lifestyle. I would like to have an IVF baby. All these are life events that require money. And I would hate for you to miss the opportunity to hit those financial goals because you didn't make a plan around them. But those goals are money goals because all those things need money to fund them. So even if it's just like a goal, you know, a life goal for you, it probably needs money to fund it, which is why money goals are so, so important. But sometimes the other

Starting point is 00:02:57 thing we do is set a real hefty, lofty goal. Like I want to save £10,000 or I want to buy a home by the time I'm 30 or just all the and that's that can be overwhelming on the other end like it's just this big lofty goal that we go all in for like these let's walk 10,000 steps a day let's go meet free immediately let's cut everything out like all these different you know aggressive and all-in strategies which as we just know don't work as well and so I think a big challenge is is that goals can be vague people kind of have an idea about being better with money I'm going to be better with money this year and that doesn't help either because it isn't specific enough to then build a plan around it and I want to save more more money what do you mean save more why aren't you saving now? And what can we

Starting point is 00:03:45 do to help you do that? And so this is why this is the challenge that comes with setting goals. So we really have to have a think about what makes money goals stick? How can you design goals that fit into your life and keep you motivated for, you know, the longevity of that goal, whether it's a lifestyle change that's forever or whether it's for a particular period of time. So today we're going to get into the importance of setting your money goals properly, the best way to do it and how to actually reach them. And when I sat back and thought about the different goals that I've had, especially money goals, they are for periods of time and they're not necessarily all for a year um and it can depend on on time of life like at the time when I said I was going to become get

Starting point is 00:04:31 debt free that was just the overarching goal now in the back of my mind I had I want to buy a home and so it was there and it was like you know visual to me and it was very important to me I was the right move girly having a look all the time, but I knew I had to clear my debt first. So that, that time in my life, that was it. I was absolutely obsessed with that one goal and I'm convinced, and I've seen other people do it since in our community, that that's what made me hit that goal so quick. You know, I cleared £25,000 worth of debt in about 18 months. I think, I can't remember the exact timeline. It definitely wasn't two years. it was quicker than two years and that was because of having this all in on that goal knowing that there were other goals waiting for me in the background um my

Starting point is 00:05:14 husband and I have had joint goals about when we were gonna you know save money for um a house deposit and a renovation you know we chose it was really expensive in our village to buy and so we had to buy a renovation and neither of us are handy like especially not me I mean he's a dab handle screwdriver and putting some pictures up but what that's not us and so we knew we'd have to pay for expertise we couldn't do the work ourselves and so you know a pot of money was needed to be saved for at the same time we were navigating that shot you know our second child and so that was a goal that we set together and again we went all in on that goal and there could have been a career change in our minds at that point there could have been or we'd like to start a business in fact we did then later start financial and but

Starting point is 00:05:56 we couldn't have picked up another goal at that time because we knew that the plan was to buy that house and renovate with cash not take take on any credit. And that was kind of, that was our goal at that time. So all the money goals that come to mind, they're all financial, but as we teach at Financial, too many people pick too many at once. And so this is obviously money goals that we're going to talk about, but we're going to talk a bit more widely about some other goals. And if you a long list you're just setting yourself up to fail so really take this time when you're watching this or listening to this what's the one or two or three things that I want to work on at this moment in my life there can be other things you want to do later and that's helpful to jot those down as well

Starting point is 00:06:39 but just picking a finite number a small number of goals is going to really help you visualize this process um so we're going to start with the foundation so when you're building your money goals you the problem with having none of them obviously as we've said is just life just happens to you you like navigate around life and you're kind of wondering why that house deposit hasn't built up or you're wondering why um you, you know, getting married, you've been proposed to and there's no savings to pay for a wedding. You have to make plans and build plans around them. When we look at the psychology of money goals, clear goals actually reduce stress and decision fatigue. And we talk about this all the time because if you know what the plan is, you can hit those goals so much more quickly because you're not

Starting point is 00:07:25 distracted by all the extra noise. You are so focused. So you can understand why this would reduce your stress when it comes to money if you have clear money goals. We also know that goals tied to your personal values are far more motivating. And so I understand this. I'm really passionate about being debt free. I want a paid off mortgage because I know that that will reduce stress on my family. I think we'll be happier, more content, especially as a couple, you know, not necessarily the children, but to know that we don't have that mortgage there. And actually later in life as our children, you know, may need to help look after us in some way. Knowing that we're not carrying around mortgage debt and we got rid of it so much earlier is a great thing for them because they don't have the extra burden. So you can understand how a financial goal of paying your mortgage off earlier than the term aligns with my personal values and my husband's personal values.

Starting point is 00:08:13 And so it's going to make it so much more relevant rather than, can I save £50,000 in a bank account? Listen, everyone would love to do that. What a great thing to have. But if I already have some emergency savings and I'm already in a good place there it doesn't motivate me as much as it does paying down that debt so I hope that makes sense but really thinking about a goal that isn't brand new to you that isn't really weird it's something that you've been thinking about whether it's a trip or whether it's paying off some debt that stresses you out or whether it's starting to invest because you feel like you're missing out that thing has to be tied something that's really important to you that you've been thinking about that you can't get out your head because you're going to be so much more motivated to hit it. Now we've all heard

Starting point is 00:08:51 of probably setting SMART goals and the SMART is an acronym and this can help give you a guide when you're configuring your goals. So making sure that your goal is S specific. So really avoiding vague goals. Instead of saying, I'm going to save for a holiday or I'm going to pay off my debt. You know, setting a goal that says, I want to save £2,000 to a trip to Italy this year. Or I want to pay off my £20,000 of debt that spread across two credit cards by November the 1st. Those are specific goals. It's very clear what's required for that goal. Now we make it measurable. So if we use the examples we've just had, having numbers to them, adding a number to this goal means we can track it. So you can put it in the tracker in the app, set a goal, your £20,000 debt across two credit cards and track

Starting point is 00:09:43 your process. Knowing that it's measurable can help you know whether you're getting closer to that goal or not. Making sure that it's achievable so that's the A in SMART we've got specific measurable and now achievable and this is because if you put in your goal I want to save a million pounds this year you might have a load of you know business coaches online or kind of motivational speakers going like, we're just, it's a law of attraction. Just think about it and it'll happen. If that goal is so big for the vast majority of us mere mortals, we'll just not hit it. It will just get demotivated because it's too aggressive. It's very similar in kind of weight loss territory, very similar

Starting point is 00:10:20 if you're trying to go for a fast time in a marathon. If you are too, and I'm all about ambition but if you're unrealistic if it's not achievable in a time frame that you're kind of going to set then you're going to be switched off so making sure that your goal is achievable but it still pushes you it still can be ambitious and it's oh by the way it's okay not to hit goals because I'm going to give you at least aim for them you there they're about so it can be ambitious but it needs to be achievable and as we've said just then it needs to be relevant so relevant to your life aligned with your values if you are so stressed about money and about paying off all these different finance providers and you set a goal to pay off twenty thousand pounds of debt you're going to be so invested in that versus it'd be really handy to have you know um five thousand

Starting point is 00:11:06 pounds to build a gym in your garden whilst that's an amazing goal if you're not interested in being fit or using a gym and that's not for you then it might it's just a fad thing because you've just decided that everyone else is setting fitness goals so you want to you can see how you might fall off that goal because you're just not driven to do it and so leaning into something that is aligned with your values it's relevant to you relevant to you every day again you can see why this is going to keep you more on track um and then the last point is you need to set a timeline so when are you going to achieve this goal by that's why like i said for the goals and debts and the app that section is so helpful because you can configure it by time. So it'll tell you how much you need to save per month or pay off per month to hit your goals.

Starting point is 00:11:49 But having a deadline that's achievable and that's relevant to you and your lifestyle can really make sure that you kind of close the circle on these on these smart goals. So, yeah, making sure that it's specific, it's measurable, it's achievable, it's relevant, and you've got a timeline. So this is where money goals are just like career goals or health goals. Like as long as you fit this criteria, you are much more likely to be able to hit them. But this is where it gets interesting with financial goals. This is, I get really excited to talk about this. So stay with me. People don't model their goals so modeling in financial terms um is kind of playing out different financial scenarios so you're predicting what can happen in the future and so doing that in a way that it brings it to life so for example so let's say you want to buy a holiday home in North Wales. And it's this like pipe dream that is down the line at some point, at some point I'm going to do this.

Starting point is 00:12:53 And because it's just on the list of all the other different goals and stuff, and because it's quite a big thing to buy a property, we think it'll take a lot of money and it will do probably but we've not actually brought it to life by modeling it so i sit there and go okay what and this goes back to the smart goals a little bit as well um where in wales is it going to be which town whereabouts it needs to be draw an area like to a kirsty and phil um and uh location location location where is it what's your budget actually do you know whether you could get a holiday home, second home mortgage or not? Have you spoken to a mortgage advisor about it? Do you know what levels of deposit you need for that type of property? Because it's often

Starting point is 00:13:35 higher than a residential one. It's usually about 25% minimum to get a second home. What is this going to be a repayment mortgage or an interest only mortgage what are those prior what are those mortgage amounts going to be hypothetically because what you do is once you know all those figures you know a what you need to save as down payments but b you know how much money you're going to need to keep up the payments to be able to have it there's two benefits to this modeling one you know exactly what this goal is going to cost. You know exactly how it's going to come to life, what you're going to need. So that's helpful because otherwise it's just this blind target of, oh, I'm going to get a

Starting point is 00:14:15 house in Wales. The second point is you may be able to do your goal sooner than you think, because when you bring it to life and you know the actual numbers, and this is this light manifestation, by the way, like I'm not a woo-woo person at all. I'm not. I'm a law of attraction person on this level. When you listen to me talk about like this, this is bringing your goal to life because you've pictured being there. You've pictured where the house is going to be, what the aesthetics are going to be like, where, how long it's going to take you to drive on a Friday night after work to go and like unwind and spend the weekend there. You're going to know all the things. That is manifestation, but doing it in a financial way brings the numbers to life as well. And so you can do this in lots of different goals. You may want to leave your shit job that's making you depressed and

Starting point is 00:14:58 you're not valued and actually you'd rather move somewhere for less money, but be happier. You might be fed up with a commute. You might want work from home you might want to go into an office whatever your thing is um it might be for less money and you might sit there and go i can't do that yet i need to build up savings and pay up pay off some debt and do this and do this and do this model it what what is this new career change that you want to move to and what other salaries in that range and then after tax using an after tax calculator what would you actually earn because what we have found is when people do this modeling bit of goal setting which so many people don't talk about it might bring your goal closer we've had people go I could do it I could do that now this is possible and so doing these

Starting point is 00:15:42 modeling exercises can really bring your goal to life in such a visual and like numbers driven way. And that I really encourage you to do this kind of modeling and not modeling. One of the ways that I also like doing this is when I talk about modeling is yes, it's financial models and Excel spreadsheets. And you need you might need to do some calculations like that to know what the goal will ultimately cost you. But do your future budget. So do a budget where you've got that holiday home in Wales as well, or where you're making extra payments to an IVF pot or where you are on a lower salary. So build some hypothetical. It might be maternity leave, like so many people, couples worry about maternity leave, but they don't actually do the budget of what it would be like

Starting point is 00:16:28 if you were lucky enough to kind of go on that journey like model it out and sometimes you know when you see when you see it tough but you can tweak a couple of things in your budget and it brings your goal and your dream to life you feel so empowered and so like i'd love for you to jump into the community actually in the app tell us about the kind of goals or message you can do fan mail and stuff on the pod now or comment on YouTube tell us what are your goals what you need help modeling we're here to help you do that because we want to bring some of your goals to life let's have a quick chat about hurdles why would goals fail because we've all been there where we go all in, you know, eating clean in the

Starting point is 00:17:05 first week of January and then someone says, do you want to go for a pizza? And we're like, yes, I do. And it's just very, very similar to finance goals. I think that making sure that, you know, money goals, when they fail, a lack of accountability or clarity can really lead to stagnation and that could be why it's failed so if you keep a goal completely private and don't share it with anyone in your life in the community online with a friend trusted accountability partner it really can keep you more yes accountable but um eyes on the prize and focused and in the game because why do people know about it i think we can convince ourselves of anything we can talk ourselves in and out of things in our own brain

Starting point is 00:17:48 especially um especially women we've got a wonderful way of doing that and so I think sharing it with someone may help stop your goal fail um I think also making sure that you have a not have it we'll start Monday we'll start Monday, we'll start next budget, we'll start next month. There's never a right time. And so sometimes I found that if a goal is too ambitious, that's why someone wants to wait because mentally we can't do it before then. I think it's much, it's much easier actually with goals or lifestyle change, because that can happen immediately because life will involve, you know, some hurdles and some going forwards and some going backs and so not putting this big goal starting off to the first of January which obviously has already passed and or you know the next month or the next payday or the next budget

Starting point is 00:18:33 you're starting to make a plan and changing before then will make you feel really in control and having an emergency fund is obviously a big thing in the financial playbook the emergency fund can help you navigate all goals because life's going to hit you and so having an emergency fund is obviously a big thing in the financial playbook the emergency fund can help you navigate all goals because life's going to hit you and so having an emergency fund to fall back on and even having to pause goal progress sometimes you know um because life's hit you that the emergency fund is your like best friend in your pocket for when a goal could potentially fail so having an emergency fund can help stop that that failure. And I think you're going to have to overcome setbacks. This isn't plain sailing. And so making sure that your goals are at the forefront of your mind the whole time.

Starting point is 00:19:12 You know, is that with the trackers in the app? Is this with a vision board? Which, you know, we'll do some stuff on socials about our vision boards and how we do them and how it's nice to have them kind of on your phone or pinned up somewhere. Even just sticky notes on your computer, but having them at the forefront of your mind can help avoid a setback. Sometimes you have to tweak a goal as well. It's okay to not get it perfect.

Starting point is 00:19:35 You might think that one's a little too ambitious and you bring it down a bit. You might think you didn't go hard enough and you need to set another one. But being prepared to be flexible is a great trait um and also you know just really avoiding feeling guilty because that's another thing that can just kibosh and send you off track because you feel so guilty and this is like downward spiral and so avoiding that and going okay that's a blip that's a setback i'm gonna keep going i'm not gonna be derailed this is a this was gonna happen i knew a going to happen. I knew a step back would happen. I found that just forgiving yourself a little bit and giving yourself a little bit of grace is really, really important. So, um,

Starting point is 00:20:14 that's super, super, super helpful. We've talked about staying accountable. So, um, having community and people in your back pocket is really, really helpful. And I found that like when people knew I was on a debt-free journey, it gave me that extra bit of motivation to do it. You know, in my life at the moment, people know that I'm trying to get extra fit in a slow way. And so people know that. And so people are gently accountable for knowing that I'm going to the gym. And if I don't go to the gym for a week, I know that I would have people in my back pocket going, are you going to the gym? Not just an accountability person, but actually tracking your expenses or tracking your progress towards that goal can help you feel accountable

Starting point is 00:20:51 as well. And you'll get that little dopamine hit when you move that tracker along or when you take something off, when you close something in. So finding your way of having healthy accountability and healthy check-ins once a week, once a day, once a month, whatever it is for you, can really, really help. Having those regular reviews again monthly might be a really good time to do this. Like if you're doing a money date night, as we've talked about, how are we doing on our goals? Like are they on track? Like are there things that we can do to enable our success? Is there a blocker to our success? Having that review is really, really helpful. And really, really important, celebrating the wins wins don't just wait to

Starting point is 00:21:25 the end of the goal to celebrate if it's a really big goal break it up into little wins I've seen people do this where they do I'd like to pay off my debt and every like say if I was paying off £10,000 when I've paid off two and a half I'm going to treat myself to something it might be something that you sacrificed for the debt-free journey or it might be something completely um new to you that's an experience but it's okay to spend a little bit of money on a reward to to reward yourself and to thank yourself and then jumping back on the train and so yeah tell us about your creative ones i've seen some really cool ones on tiktok actually so i'd love to know now all this goal setting is great if you know what you want. But so many of us really struggle knowing what we want at any one time. We are influenced by our family,

Starting point is 00:22:11 our friends, we're influenced by social media. There's so many things going on that we just don't know what we want in the moment. Why? Like, what's more important to me? What do I? It's just really, really hard. and so I was taught a really good technique a few years ago that's worked so many times for people that have been in the financial community that's been my friendship groups and it's my biggest biggest tip for people that find themselves in this situation and I am coming up to doing some new ones I think so I'm going to do the same but it's a letter from your future self so what you do is you um it's some subconscious writing time. You're going to

Starting point is 00:22:46 need like an A4 sheet of paper, well, multiple papers, but you're going to need an A4 or an A5 notebook. You're going to do two pages per letter. And you're going to pick a date that's 20 years in the future today. So if we're in 2025, let's pretend it's the 1st of January. I know it's not, but let's pretend it's the 1st of January, 20 know it's not, but let's pretend it's the 1st of January 2045. Think about how old you're going to be then. Okay. And think about your life, like really like close your eyes and not if you're driving or running, but like slip into that time, where are you? Okay. And what I want you to do is write a letter to me. It's a from your future self to me. Dear Laura, I want you to write it the date, 1st of the 1st, 2045. Dear Laura, and I want you to describe your life. And I want you to really bring to life the senses and the smells and the sights. Where are

Starting point is 00:23:39 you? What are you drinking next to you? Is it warm? Is it cold? Are you by the sea? Are you in a city? Are you in an apartment? Are you in a mansion? Are you on a boat? What family is in your life? What partner is or isn't in your life? Do you even have a partner in your life? What animals are in your life? Think about the age that you are, what you're doing for work, what you're doing for work what you're doing for pleasure and and tell me how it feels and you need to write one full side of a for minimum more is better really important that you do a long longer if you can because your subconscious comes after quite a bit of writing that's why we start with where you start and what you're doing because it starts to really bring to life and explain your life to me this is like obviously your ideal life and tell me about it okay so we're going to do

Starting point is 00:24:30 that letters 20 years time the next letter you're going to write your hands gonna ache it's gonna be like doing lines at school especially if you need to write it not type it you have to hand write it you're going to do another letter dear laura and it's the first of the first 2035 and that is obviously now 10 years away you do the same thing where are you who are you with what's making you happy what's bringing you joy what are you doing for work what are you doing for pleasure what do you know what's your health like what's your fitness like what's your your health like? What's your fitness like? What's your mental health like? Talk me through it. The third letter is five years time. So it's the first of the first 2030. These are lovely round numbers for my mental math. So I appreciate the nice round 2025 that we're in now. But you're

Starting point is 00:25:18 five years from now and you're writing the same letter. And then the last letter is a year from now. It's the first of the first 2026. And what will help, what will start to happen is when you jump into the future 20 years, it's not these impulsive goals. It's not these, it's like, it's not these unachievable with a slow timeframe. You've got 20 years to hit these goals. You've got 20 years to build that life and the pressure's off. But what starts to happen is you'll find as you're doing these letters is you have to start being more specific and you have to start working backwards from those lofty 20 year goals and go, well, how, what was 10 years before that? If I want to hit that in 20, what's 10 and then what's five and that's one. And actually in

Starting point is 00:26:02 a year, what it helps you do do and I hope this works for you but you end up with a letter listing out the things that you've achieved in a year and it usually ends up being quite achievable and kind to yourself and it might be things like doing a course that enables the job that enables the lifestyle that's long term. It may be, you know, going on a parenthood journey. It may be ending a relationship that's not serving you because when you've written the letters, there are certain people not in them. And, you know, disclaimer, if big decisions come out of these letters, I'm sorry and not sorry. Like it's all this is coming from you what should happen is what you really want will come out um I've done multiple of these letters I think I've done it three times in total since I was about 23 24 so it's something that you can

Starting point is 00:26:59 revisit and things change obviously we change as people and so I expect you to do them more than once but maybe take the time this this you to do them more than once but maybe take the time this this January to do those letters or whenever you're listening to this and get your partner to do them as well like separately and you don't have to share them by the way as well it's so private these can be super private and you don't have to share them with anyone um but if you want to you can and that exercise really might bring to life the things that you want to focus on and then you can kind of pick out from the letters these goals and then go through the process that we've talked about today

Starting point is 00:27:31 so that's your homework if you if you even if you are sure of your goals have a play with it do some writing like this is like classes classes out of session this is your homework see if you can take this and bring your goals to life and then we'll translate them into money goals. Then we'll make them smart. Then we're going to model them. And then lastly, you're going to build the budget that helps you achieve them

Starting point is 00:27:56 because those very goals need to come to life. This is the point of this session. We're going to do our budgets and we're going to work out how our goals fit into that budget. So yeah, there we have it. I do wish you all the best. I want you to make sure your goals are your goals and that there's no pressure around them. And if you don't want to do them in this January and you want to pick a different time of year to do them,

Starting point is 00:28:20 you just come back to this episode whenever you want. Before I lock the vault, I would love it if you would send an email to helloatthevault.com. Let me know what topics you'd like to hear from yet. Let us have some feedback on the goals. Tell us about the letters, please, please, please. I would love for you to share about how you feel about the letters.

Starting point is 00:28:38 And just a disclaimer, The Vault Unlocked is a lighthearted research and chat about money topics. It's not financial advice. Take care.

The Vault with Financielle - UNLOCKED: How to Set Money Goals You Will REACH!

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