Where would you like to see yourself in 5 years? We get asked this question a lot of times by interviewers but how many times have we sincerely answered this question for ourselves? A lot can happen in 5 years, you could move from being a tenant to being a landlord, from middle class to upper class, or from an amateur to a professional in your field and it all starts with a plan.
Did you know that a written financial plan increases confidence? According to the 2019 Modern Wealth Survey, 63% of people with a written financial plan say they feel financially stable, while only 28% of those without a plan feel the same level of comfort. You also have higher chance of success when you have specific goals. Here are 5 easy steps to create a 5-year financial plan.
- Put your goals in writing: Write down specific, realistic goals and put them in order of importance. Your goals should also be audacious, don’t forget to shoot for the moon, if you miss, you’ll land among the stars. Your goals should fall under the categories of buying a home, paying off debt, saving for retirement, starting a business, etc. An example could be, “Buy a house in lekki in 3years”.
- Attach a cost to each goal: Find out the cost implication of each of your goals. If it’s a car, find out how much you need to save each year to afford the car. Attaching a cost makes a goal more realistic. A goal like “Save 12million every year for 3years to buy a house” is more achievable than “Buy a house in 3 years”.
- Break down your goals: Dissect your goals into smaller bites that can be achieved weekly, monthly or yearly. For instance, if your goal is to pay for a house worth 24million in 2years, that means you have to save 12 million each year by saving 1 million every month or 250,000 every week.
- Monitor your progress: Self assessment is very important because it helps you know what you need to stop doing, start doing, do more or do less of in order to achieve your goals. You can decide how often you measure your progress, it could be yearly, bi-annually or quarterly.
- Do the Work: Now that you have written your goals and what it would cost you, you need to put in the necessary work required to achieve those goals. You might need to get an extra job or a side hustle to make that extra income. If your goal is to get a better job, then you definitely need to acquire new skills.
One last thing, your goals might scare you at some point. If they don’t, then you need to set some new goals. No matter how audacious your goals are, envision what you want your life to look like in 5 years and put in your best effort. Your goals are achievable, good luck!👍