The Role of Financial Goals in Financial Housekeeping

It is a natural tendency to default to a comfort zone or follow the path of least resistance. This is the main reason narrows is the road to the fulfillment of dreams, and the few that follow it, the minority that controls the majority of the abundance of the earth.

Remaining disciplined is not a natural state for most mortals like us, hence quite often, we need the push by pain or the pull of goals to keep moving. Having a financial goal helps keep us focused and disciplined as we progress toward the attainment of that goal. The more aligned a goal is to the attainment of our dreams, the more motivated we are in making it happen, if there is a burning desire to attain that dream.

We have a pool of cash we draw from, for our day-to-day expenses. The more cash we have in that pool, the more undisciplined we are in spending. More money generates more spending. Reminds me of one of Murphy’s laws – expenditure always grows to meet income well, if you allow it)

Consider this: Have you ever had a monthly payment that stopped at some point? Say you were paying off a loan, cooperative contribution (esusu) is whatever it is you were paying monthly. While the payment was running, that put a squeeze on you. You had less money to spend. This means you had to think hard before you spend because your pool of cash was limited. You had to look the other way when your peers are picking up clothes, shoes, bags, jewelry, etc on credit, knowing that there was no room left for buy now, pay later.

What happens when we complete the payment? – the money flows back into the pool, available for spending. You will notice that the money soon disappears without anything to show for it. While you were making the payments, the money was visible, and you knew where it went. In the pool, it disappears.

This is where a financial goal comes in. When you have a goal, a goal that stretches you and whose outcome you desire hard enough, you will be forced to put your financial house in order to free up cash to meet your commitments to the goal. You are effectively taking out money from that pool, deliberately creating scarcity.

Have you noticed that you make better financial decisions when you are short of cash? You drive a better bargain and end up with a better deal when you have less cash to burn. If the vendor tells you the last price, you keep pushing because you don’t have enough cash, and if the vendor is adamant, you can truly walk away knowing you have nothing more to give. Oftentimes, your offer is accepted. If you had more cash, you would have settled at a higher price.

If you don’t have enough cash, you think thrice before you buy anything. You hold onto your cash more tightly and are less disposed to turn cash to thrash.

What you have done, is to deliberately become poor for a season, so that you can create a life of abundance further down the line. This is a classical case of delayed gratification. This comes together when you have a financial goal – like acquiring an asset you would not normally afford (eg buy a real estate property, a business, save for university, or to learn a skill you need to move to the next level, etc)

The cash squeeze you have created will force you to better manage your finances, stick to your budget, balance your checkbook, respect your loose money, and keep them in one place for better future use, etc

By the time the dust settles, you would have killed three huge birds with one stone:

1) Attained your financial goal
2) Regained control of your finances
3) Learned the rare art of delayed gratification

Your journey to financial freedom is not just about attaining financial abundance. By the time you get there, you would have become a better you, now in a position to be who you were born to be and do what you were born to do.