Financial goals: statement or aspiration?

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“Great accomplishments start with great aspirations”

Entering into 2024, it’s time to think about financial goals for year ahead.

As 2023 has seen an easing of inflation, the aftermath of increased costs has left a lasting impact on our savings and financial wellbeing.

Firstly, the end of the year marks a threshold and invites a pause for reflection. It’s a great time to reflect on the year we are leaving behind and look ahead. Each year, this will be the best time to evaluate what we have done during this past year.

Most people have financial goals that they want to achieve, but many can’t follow through till the end of the year.

Working towards your financial goals is a great, proactive move, but if goals are set merely as a life statement and not an aspiration, it will not have the courage to achieve.

A deeper understanding of differences on life statement and aspiration will give you better financial goal setting skills and the discipline to achieve them.

During the recent holiday season, I had an opportunity to do some shopping and I got to know about the term fashion statement (shoes, dresses, pants, jewelry, sunglasses and others).

I got curious and tried to understand more on this term and I learned that fashion statement means clothes that you wear or something else that you own in order to attract attention or to display a certain social status.

Then, I tried to interpret fashion statement and life statement; they both have a lot of similarities. Research shows, the desire to fit in with a certain social group, or to stand out from others, can also be a significant driver to your life statement goals.

What’s wrong with life statement goals? Most life statement goals are motivated by the desire to display wealth and success to others, and to improve one’s social status.

These goals are set to impress others, these goals will not give you real life satisfaction, just short-term happiness. On many occasions you can still be happy without achieving your life statement goals (like buy a Ferari, bungalow or branded clothing).

In contrast, let’s try to understand what’s a life aspiration. Aspiration means a strong desire and tend to be directional. Comparing life statement with aspiration; aspiration not only helps us in achieving goals, but it also helps in maintaining motivation throughout the journey.

Usually, aspirations can answer the question “Why?”, the purpose of your aspired goal (Start a business: the purpose might allow you independence and control in your work, the potential to earn a higher income and to pursue opportunities you’re passionate about).

Sadhguru appropriately quoted, “If you do not value the importance of aspirations, you do not value your future”.

Financial goals need an aspirational component rather than a life statement. Aspirational goals are important because they lead you towards a happy and successful life.

Your aspirations also indicate what you value and what’s important to you. For example, if you aspire to be a doctor, you value service and humanity. Aspirations are the driving force to help you achieve your greatest dreams in life.

Now, if you are trying to develop a financial goal for your life’s aspiration that can serve as a source of inspiration, there are some things you can do to make sure this vision of your life will have a positive influence.

Below are some attributes of life aspiration goals:

Don’t compare yourself to others

Aspirations don’t need to be grand or luxurious to be important. Other people might have very high aspirations, but that doesn’t mean that those goals are right for you or your life. Instead, you should focus on finding aspirations that will help you feel fulfilled and satisfied in your life.

Find your purpose of financial goals

Figuring out what gives your life meaning and purpose can also help you develop aspirations. Learning how to live your life with a purpose can lead to a sense of control, satisfaction and general contentment. Feeling like what you do is worthwhile is, arguably, a significant key to a happy life.

Give yourself time

It is important to remember that while aspirations can be motivating and inspiring, you don’t need to pressure yourself to figure it all out now. Instead, give yourself the opportunity to learn and grow. Try new things, gather information about yourself, and then think about how what you have learned might contribute to your aspirations.

Lastly, personal finance, just like the physical or mental kind, takes time and effort. It doesn’t happen overnight. You don’t have to understand everything about personal finance at once.

No matter what your past financial life looks like, recovery is possible. When it comes to setting financial goals, feeling a sense of inner satisfaction and happiness is crucial.

A good way to start your 2024 is to stop focusing life statement goals and focus more on aspirational goals. With this, I wish you all a great year ahead and Happy New Year!

Gunaseelan Kannan, CFP, a Financial Adviser Representative by Bank Negara Malaysia and a Licensed Financial Planner by Securities Commission (CMSRL/B4198/2013). He is the winner of Malaysian Financial Planner of the Year 2020, from Financial Planning Association of Malaysia. He can be reached at [email protected].