People always look for the ways to change their life. People want to live healthier, wealthier, stressless, more freedom and etc. Different people who have different purpose in life will have different demands on their life.

Generally, I believe that all people want to live with more money. I bet that there are no people who want to live in poverty and lack of money. This is because we cannot eliminate money from our life. Therefore every person has some kind of demands on money. Your demands on money depend on what kind of lifestyle you want to have. Different level of lifestyle will need different amount of money to support and hence different actions to achieve it. However no matter what level of lifestyle you want to have, there is only 1 step to get started - Changing The Way You Think About Money.

Why Change Our Mind about Money?

We only do whatever we believe in, don’t we? For example, if you believe that you have the chance to win a lottery, then only you will invest on it. I don’t believe in lottery so I never pay any money on it. Can you see it? I have a different mind about lottery and this makes me take different action and never spend money on lottery.

Our mind determine what we believe and our believe will determine our actions. Actions are the main factors that change our life and achieve whatever we want to. So if you want to achieve something, then you must change your mind first. This will ensure you to take the appropriate actions to success.

So if you set a goal to have a better life in personal finance, then you must start by changing your mind about money. This is a crucial step for you. If you want to achieve financial freedom, then you must know what kind of mindsets you must have to make it.

Do you believe in luck? I knew there are people who don’t believe in luck. They just believe in their own abilities to success rather than LUCK. This make them work hard and do something that most ordinary people will not do until they end up successfully. But do you think that LUCK really doesn’t involve in their success? Let us find out…..

What is LUCK?

Before this I heard that LUCK is an acronym, “Laboring Under the Correct Knowledge”. I also heard that LUCK is where preparation and opportunity meet. In other words, you are considered as lucky if you can achieve something you want to because you manage to leverage on an opportunity using your knowledge, information and ideas.

I believe all of us have LUCK in our life. We are not lucky only because we don’t prepare for the LUCK. Since the preparation is not enough, then there are nothing happens even there are opportunities appear in front of us that will make us lucky. In fact, I found that if you are not well prepared, you won’t see the opportunities appear around you. This is the main problem where so many people are not lucky and successful.

What is important in personal finance? This is a topic that I want to write about long time ago. But before I start talking about the 5 important things that you must concentrate in personal finance, let me tell you what I think personal finance should be.

Personal finance, like the words indicated, it is about the very personal ways to manage your money, your finance. “Ourselves” is the greatest assets to all of us, don’t you agree? We can hurt anybody easily but not ourselves. This is the nature instinct of human. Personal finance also the same, we must do everything that is good, helpful and make us feel better in our finance, in our money. We do this for ourselves, our future.  So what is important in personal finance? All of them should be able to give the best to our financial future.

Financial Literacy

Financial literacy is the ability to make the appropriate decisions in personal finance management. With the correct decisions, we will have a total different future. This is why how good we are in financial literacy will determine our wealth in future. This is also why I strongly encourage myself and people around me to pay attention on financial literacy.

Previously I shared with you how you can do a financial self-assessment so that you can know where you are now financially. This is the most important and basic step that everyone of us must take before we make any financial goal.

Through the financial self-assessment, you will find out your financial problems and hence set a goal and plan to overcome them. I think this is the main reason why we must set a financial goal. A financial goal must be a goal that can improve our finance level or solve our financial problem. It is hard to make a good financial goal without knowing what kind of problems you have right now If you haven’t do the financial self-assessment, you can read my post : Do you know where are you now Financially and find out the steps that you can do so.

Taking Control of Your Money by Setting a Financial Goal

Congratulation if you knew your current financial status. So let’s move on to set some goals and start taking control of your money. Below are some of the tips that I would like to show you on how to make a financial goal.

1. Decide what you want. First you must decide what you want to achieve. Now you know your financial status and understand your financial problem. You should know what kind of financial problem and weakness that you want to cover. Just ask yourself what you want to improve and what kind of end results you want to achieve in next week, next month or end of the years. If you feel hard to make the decision, maybe you can read my article about the 6 financial levels. This article will tell you what kind of financial levels that available for you. So you can spend some time and then choose 1 that you want to achieve.

2. Which Problem to solve first. I suggest that your first target should be those problems and weakness that you have found from the self assessment test. If you found that you are paying too much of debts, then getting out of debt should be your first choice. If you are having a negative balance at the end of each month, then you have to control your expenses and make it back to positive. Or if you found that you are suffering from the high mortgage payment or car loans repayment, then you should consider whether you change your car and house or look for second options to drop down the payments.

3. Make a plan. You need a plan to succeed in anything. Now you know what you want and select the financial levels you are targeting at. Then you also know your current problems and etc. So with this 2 important information, you can start compiling a plan to solve your financial problems and move forwards to your goal. For example, I want to achieve financial freedom for my life. Then before achieving it, I have to pass 2 levels – financial security and comfortable. Of course, if you are in debt, then you have to make your balance break even first before those 2 financial levels. In financial security, we are looking for “security protection” on our finance. So in this level, we must prepare our savings, emergency funds and last but not least, good money management system that will prevent us from the financial disaster. After that, we will look for business and investment opportunities to build up our financial comfortable level. In financial comfortable, we are living comfortably with excessive cash from business, investment and our job. So with this money we can start building our asset empire and achieve financial freedom. This is just an overlook on my plan to achieve financial freedom.

4. Take 1 action at a time. Please make your plan simple and take 1 action at a time. People always fail because they always try to take a big step at a time. In most cases, this will make you feel overwhelmed and stop taking action. I have this experience before too. In order to solve this problem, I found that making a plan is a good solution. In my plan, I always list down what I want, what is my current strength and weakness and finally write and list down the small steps 1 by 1 in my plan. After that I just follow my plan and I will achieve what I want. The power of a plan with some small steps is it can let you feel easy. Once you feel it easy, your mind will be clear and you will take action easily.

Last But Not Least …..

Please set a financial goal that you strongly believe that you can achieve. You will be lack of motivation if you set a financial goal that is too high for you. For example, if you set a goal to be a millionaire in next year. If you believe it then this is a good goal for you. But if you are not, it will block you instead of motivating you and move forward. So please set a financial goal according to your ability which you believe you can make it.

Good Luck

Harrison Loke

A dreamer who chases a Goal

Year 2008 is around the corner and we are now in the busy December. We are busy in December because we have to prepare for the Christmas Day and also the New Year Celebration. Some of us might busy for the year-end holiday. A lot of shopping and planning have to be done within this month.

Besides shopping and holiday planning, there is actually a process that we cannot miss out. It is Goal Setting for the coming up 2008. You can set any goals for 2008 but I would like to remind you to set a financial goal for yourself so that you can take some serious actions for your personal finance.

Don’t know what to set? Don’t worry, in order to assist you on this, I have categorized the top 5 financial goals that you can set for your life. Here they are: