Australian Finance Podcast
Setting your financial goals & action plan for 2023 (FREE template)
30 Dec 2022
Transcript generated automatically by AI and may contain errors.
Chapter 1: How can you reflect on your financial progress from the past year?
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Hello, I'm Kate Campbell. And I'm Owen Rask. And you're listening to the Australian Finance Podcast.
A podcast where we talk about money, finance, investing, and all that good stuff.
We're helping you invest your time and money better one podcast episode at a time.
Yes, so please subscribe if you like the series. And don't forget you can find us on social media. We're on all the platforms. Kate, where can people go?
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Chapter 2: What are the steps to set achievable financial goals for 2023?
Yeah.
So what is that? What does that mean?
Yeah. So figuring out, okay, there's probably something in most people's minds that they want to achieve. Maybe it's a holiday at the end of this year. Maybe it's buying a house. Maybe they want to retire early. Of course, you can work towards all three things, but let's just pick one thing. Like you want to go on a holiday at the end of the year.
Sure. Sounds good.
Why is that meaningful to you? Why do you want to achieve that goal? And even just writing down this at the end of, in December 2023, I want to go to Europe. Why do I want to do that? I want to relax. I want to explore museums and art galleries. I want to spend some time overseas with my family. I want to have a new experience. I want to have a break from work.
Sort of understanding that picture of why that goal is important to you, because as you go through the year and working towards that goal, sometimes you're going to have to make some sacrifices or let's not say sacrifices, but maybe you're going to have to
Rearrange.
Rearrange the way you budget and put money aside for different things so you can put money aside for that $10,000 goal for that travel. And so when things feel a bit tough or you're a bit like, oh, that's annoying. Why do I have to cook dinner again? Why can't I just go out? Yeah. You can come back to the drawing board and go, okay, this is my goal and this is why I'm doing it.
Yeah, and I think that's so important because people, you used the word accidentally there perhaps, which was sacrifice. A lot of people have this idea that saving towards a goal is indistinguishable from what we're talking about. It's a sacrifice if I have to give up my latte, everyone beats on lattes.
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Chapter 3: How do you break down long-term financial goals into actionable steps?
Was travel the best part of your year? Did you value exploration and try new things or did you really value stability?
We talked to Nir Eyal this year and it's like an internationally renowned speaker and author. It's just amazing. And he talks about his book Indistractable, which is like fascinating.
moving like they're basically to be distracted is to move away from something so that like if you have traction towards something distraction is moving away from that so you want to have traction in more parts of your life and he said one of those ways you can do it is like thinking about how you use your calendar and do all that sort of stuff he's really effective obviously he's like a guru in this but um you you introduced an idea there of just looking at your calendar and be like where do i spend all my time i do this with work i'm like i color code as you probably know yeah i color code my my stuff because it gets really busy and i'm like
Holy heck, like I spent like 30 hours this week on podcasts and I spent like 20 hours on this thing. Like I want to change that around. I want to move this around. I want to shake that up. And it's through that kind of just quick look. But one of the things that people know that you're a huge fan of is the 10 things activity, which is like...
10 things you spend money on in one column, 10 things that bring you joy in another column, then draw a line between them. If you find that you're spending the most money on the first thing and that brings you the 10th amount of joy, you know that there's a massive rearranging that needs to happen. You need to make some changes. And so just the two columns, what have I enjoyed doing?
What do I get joy from? And what am I spending my money on in order? You probably don't even need to look at your bank statement. You probably know what you're spending money on, roughly, like mortgage, car, personal loan. What are you spending money on? Maybe exclude your investments and just rearrange. You could do the same with your time, couldn't you?
You could say, okay, there's the things that I enjoy doing. Where's my time going? It just costs you nothing to rearrange your time. Really simple ways to, when you sit down and you think about these goals... Does your goal that we're about to talk about, we'll talk about ours in just a sec, does that line up with the list that I've just created?
Yeah. And something else I pushed myself to do in the past year, and it did take a while, is actually write down my five main values and a description because everyone interprets words differently. So it's important to define that word for yourself. And that took a long time looking at different words and meanings and thinking about... what I really value and then writing this down.
And this is something that I don't look at all the time, but when I'm making a big decision or a big spending decision or maybe a big investment of my time, I'm saying yes to something that's going to have quite a significant impact on my calendar for the foreseeable future. I can go back to this list and go, does it fall within these categories or at least a few of them?
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Chapter 4: What strategies can help you stay accountable to your financial goals?
Action orientated, so actually making things happen and solving problems.
community in all areas of my life really and building community and so and the last one is legacy actually making a tangible difference in the world through education and and being generous with the resources I have and so I think like throughout 2022 I was able to align a lot more of what I did with my time and my money with those things.
You know, I did this similar process because I really struggled to find some of these things when I was working with my psych. But if you haven't already listened to our nine lessons, oh no, that's coming up soon on the show, isn't it?
Yeah, we're getting a bit confused because we're recording things in advance in December, so...
In January, there's an episode on lessons that we will talk to. And I highly encourage you, if you haven't already subscribed to the show, please do. But there's this incredible episode coming up on the nine lessons we learned in 2022. And in that, I talk about a lot of the things that have worked for me and Kate does the same.
But one of the things that I couldn't really get grasped with the goal setting was like, how do I actually start from like zero, like nothing? And I worked through this with my psychologist. And she was like, here's a very simple plan.
I want you to get a piece of paper or just use, I use Notion and just put all the things you like on one side, fresh air, trees, animals, like building things, like just literally put all the things you like and on the other thing, all the things you don't like, you know? noisy places, being in a crowded area, micromanagers or feeling constrained.
These are just little things that can help you find your values. So maybe one of the values there would be freedom and value creative freedom. And that's another way that you can work towards these things. But Kate, can you give us a rock solid example of how you can set a goal And how you can break that down.
Because a lot of people set the goals and just like, yep, that goal, 2023, that's my jam. But I don't actually think about through the steps or the process to actually make it become a reality.
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Chapter 5: How can you identify your financial values and priorities?
And so she even broke it down to about $192 a week.
So there you go. Okay. So that's something I have to achieve every week is $192. Yeah.
So suddenly it's taken the goal of $50,000, which is- Pie in the sky. Huge number. And in this example, we're starting from zero and broken it down to $192 a week, which is still a meaningful amount, but it's a lot smaller and more bite-sized and tangible because you can see $192 a week.
Most of us have had that money in our bank account at some point, but compared to $50,000, a lot more achievable.
Yeah, I don't have 50K.
Yeah. And so then you're having to go, all right, is $192 a week in money that I can put into a high interest savings account for this house deposit achievable right now? Yep. And it might not be. You might not currently be in a position where your income is greater than the expenses, all the money you're paying on bills and rent and things like that.
And so then it might be time to go, okay, is there any ways I can create more income for a side hustle for changing jobs through reducing some of my expenses or just starting with a small amount? I might start with $50 a week and then hopefully in year two, I can increase that amount.
Yeah, if you're anything like me, you probably hear that, you're like, ah, dumb, I can't do that. But one thing, like a superpower, one of the things you can do is just automate a lot of it. Like, okay, I can't save 192, but I can save 100.
Yeah.
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Chapter 6: What are common pitfalls when setting financial goals?
Why don't you chuck some of them down? Chuck them down. Because I'll tell you what, when they happen, you'll be like, I'm glad I thought about this. And I think Dave from Strong Money talks about that a lot. He talks about the setbacks that happen if you prepare. Obviously, being flexible is the best way to prepare for that. Kate, that's a great example of saving for a first time.
We've been through that journey, both of us. It's a great journey to go on, but what's a goal that you have for 2023?
Yeah. So mine is probably fitting more into that longer term goal basket because it's not something I'm going to achieve in the next 12 months. And it's not really something that's going to achieve in the next few years, but I would like it to happen before I retire.
Okay. What is it? Let's just start with what the goal is.
My goal is to buy a piece of land in regional Victoria and plant a forest.
Interesting. For two reasons. One, you said plant, but the other one is you said you wanted to buy this piece of land. Why is that important to you?
Many years ago, I went to Creswick in Victoria, and there's a forest there that was planted by a man over 100 years ago. And there's so many different species of trees. And he donated that forest, I think, to the National... I'm not even sure what it's called.
Yeah, but he was in a position where he could donate a forest, which is pretty cool.
Yeah, in his will. And now it's available to the public to walk through and learn about different species of trees from various places in the world and have somewhere where they can talk and relax and go on walks with friends or family. And I just saw how much joy people had in that experience walking through the forest. Yeah.
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Chapter 7: How can automation play a role in achieving your financial goals?
So just, okay, yep, cool. What about then, so this maybe is five years when you start to like think, I really want to do this in five years. What could you be doing between like now and the next few years to get this going, so medium term?
Yeah. So I probably want to be investing at least $10,000 into this portfolio a year. And this is an active investment portfolio. So I'm not investing in ETFs in this portfolio. Interesting. So it's a slightly different approach. So I'm also learning a different skill set at the same time. So what could go wrong? Yeah. We'll get to that.
Don't worry. Yeah. Okay. I like it.
I do already have a bit of money in that portfolio.
Okay. So you've already made some traction. You've already got some traction. That's wonderful. Yeah. Okay. So then I'm going to ask the question of what could go wrong?
Yeah, I mean, I might not get anywhere near that or my goals might completely change. But I think because this is a side goal, it's to me if something goes wrong, it's less important. I mean, I'll get there eventually. It just might happen in 15 or 20 years.
Yeah, push it back.
When I'm much more financially secure.
Yeah. I would imagine like if you're relying on income to fund it, like loss of job would be one risk, potential risk. I'm like, can I just put that down?
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Chapter 8: What should you consider when planning for unexpected financial changes?
Yeah.
So maybe- Learn more about what kind of trees I'd be planting.
It's a conversation, but conservation is- Yes. Conservation. Yeah. And contact people. I'll just put that in there. So, okay. So just in terms of your sub goals, we've got, you want to set up that automation in the short term. You want to do the tasks in Google calendars. You actually invest the money. You want to invest, you probably recommend about 10K a year, which is 800 bucks or so.
Contact a broker. Learn more about like the conservation and contact the right people.
Yeah. And I think if I have any unexpected windfalls, such as maybe I sell something that I wasn't planning to sell and have some capital gains, or maybe I get a bonus or money that maybe I wasn't planning for comes into my life, because I think this is something people should factor in because we often get this money. Maybe I get a tax refund. That'd be nice.
But it's that money we're not expecting. And if we don't have a
a direction for it or we don't give it direction just kind of just sinks back into general revenue so i'm gonna maybe add here in the short to medium term that if i do have anything uh any free kicks as you called it uh i will add that to this goal yeah i like it free kicks got it yeah or if i um yeah if i sell something or make some extra income on the side i think i would direct it towards this
And one of the things we've got here is accountability, like having someone to, the Google calendar is actually a way to have free accountability. It's like just checking in with you. But even, yeah, I'm happy to be your accountability person on this and see how you go. And I dare say it as podcast listeners now.
You're all involved now. Maybe like at the end of each year, we will share our progress towards these goals and then Owen and I can check in.
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