why personal financial objectives are important

the first time that the need for me to seriously review and plan for my expenses came about towards the end of april: when i put the forecasted expenses for sending my two siblings to the university in my “cash management sheet” and after i realize how much i spent during my holiday with david. although i have been maintaining a cashflow sheet for a year now, i was never really disciplined and determined to follow a budget.

i admit that the only reason i started it that time was because i like the look of the six-digit balances on my bank accounts. looking at it now, it could have make a huge difference if i put my good fortune to better uses instead of travelling every weekend, buying unnecessary capital expenditures, and taking diving lessons in a frenzy.

but that is all water under the bridge at this point. i had reasons- not financially wise they may seem- for doing them. and now, i am ready to pick up where i left off.

i have been debt-free for a year and two months now. without loan payments to worry every month, i felt more freedom with what i can do with my money. however, it also made me more careless with where i spent it. although my cash management sheet was pretty extensive, i rarely hit the budget because there is always something somewhere i have to spend money on that i haven’t fully factored in. either that or i have become a victim of irresponsible spending behaviour again.

looking at my past month’s performance, it was then clear to me why, inspite of tracking my expenses, i am always missing my monthly target. the reason for this, i realized, was that i have no clear financial goals whatsoever. the targets were nothing but a rough estimate of my monthly expenses and i had no detailed financial objective except for wanting a nice sum of figures at the total row of my excel sheet that i could look at.

so, after sitting in front of my laptop for four hours, i have drawn up a financial objective (something i am very much sure will change from time to time but something financially solid enough to start putting my financial planning skills into use).

my financial objectives from now until a year later:

1. be debt free (which was in red bold letters and a side comment of “achieved” besides it)
2. established an emergency fund equal to six months’ worth of my monthly cash outflow
3. invest a certain amount on UITF or mutual funds
4. open an internet cafe business at home
5. invest a certain amount on pension plans

it took me longer staring at these objectives compared to writing them down. they were staring back at me intimidatingly; i have to admit they look pretty ambitious. and they are screaming for due diligence and strong discipline. at the back of my head, the anticipation of the august holiday and the jingle bells in the UK, not to mention the cost of the CMA exam were thumping for attention on their own.

but one thing i was damn sure about as i stared longer at these objectives was the growing determination to realize them. yes, they seem ambitious but they were perfectly doable, given my right attitude to managing my cashflow. i do not even have to give up the little comforts i currently have.

“my little corporate financial planner.” david teased.

it is about time i apply the same passion i have on my company’s finances to my own financial worth. afterall, if you don’t practice what you preach, what good are you?

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