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A six-point plan to reaching your financial goal

Michelle McGagh's year of no spending taught her how best to focus her finances on happiness.

A six-point plan to reaching your financial goal

How much do you care about money? Of course, we need it to cover our essentials, and a little bit on top for some fun, but is it the thing that makes you happy?

We’re always told that ‘money can’t buy happiness’ but one in four millennials haven’t got the memo. A survey by car manufacturer Skoda (bizarrely) shows that 25% of under 30s believe the key to lifelong happiness is money.

This compares drastically with just 9% of over 60s who think the same.

Before you bemoan the fact that young people are obsessed with shopping, slaves to the consumer machine and it wasn’t like that in your day - it probably was.

As we get older, we earn more money and acquire the things on our ‘wishlist’ that bring status, comfort and, at the time, happiness. But when we’re younger and we can't afford them, earning money to buy them is high up our list of priorities.

I’ve fallen into the trap of believing that money (and spending it) brings happiness. I think we all have.

In the past I’ve put too much emphasis on acquiring items in lieu of actually considering what would make me happy. I was focusing on short-term fixes so I didn’t have to think about the long term and what I really wanted from my life.

Thinking about the long term is frightening, especially if you realise your short-term actions aren’t aligned with a long-term goal and you have to change your ways (and that’s never easy). It’s much easier to just carry on as we are, not thinking too much about our future happiness and instead acquiring trinkets that give us a quick fix.

Giving up spending for a year knocked my mindless spending on its head and forced me to consider what it is that’s really important in my life. And I agree with the older generation; spending time with people I love and experiences became far more important to me than the idea of new shoes or the latest gadget.

It’s difficult to drag yourself away from our consumer culture, especially we're constantly bombarded with advertising on our computers, on our commutes and on TV. There is a famous ‘statistic’ that we are exposed to around 5,000 adverts a day. I don’t know if that’s right, but advertising is certainly difficult to escape.

No wonder we’re all such shopping zombies.
But it doesn’t have to be like that. You can work towards your own happiness rather than working your way through a catalogue of ‘must-have’ possessions.

Financial security is one thing that makes me happy, which is why I’m trying to pay off my mortgage as quickly as possible so I know I won’t have to keep on working at age 70.

I’m happy to make short-term sacrifices in order to overpay my mortgage and ultimately gain that security.

And I think anyone can do the same, but it won’t happen overnight and you’ll need some discipline. Here’s the steps I used:

1. Find out where your money is going: if you don’t know where your money disappears, you have no chance of diverting it to a better cause.

2. Decide if where you’re spending your money is actually making you happy - and crucially, figure out what would make you happy.

3. Work out how much money you need to reach your happiness goal: maybe you want to take the kids to Disneyland or retrain for a new job, or just put an emergency fund in place.

4. Set smaller month-to-month goals in order to reach your bigger goal.

5. Pay yourself first: set up a direct debit into a savings account to leave your bank account at the same time as your bills so it’s gone straight after payday and you can’t spend it.

6. Stick with it.

Number six is probably the most important step. Unless you are loaded, it’s unlikely you’ll be able to pay for your happiness goal straightaway and will need to exercise some discipline to get there.

No one said saving towards something that makes you really happy is easy, but the rewards are better than anything you can buy in a shop.

8 comments so far. Why not have your say?

Law Man

May 26, 2017 at 19:18

Pure speculation on my part - the reasons for a different attitude to use of money to buy consumer goods (not money for its own sake):

1. On the supply side, there are more consumer goods available today;

2. There is far greater pressure applied from without to possess them: the use of marketing techniques to suggest you are a failure if you do not have X, Y & Z; keeping up with the Joneses;

3. The greater availability of consumer credit, coupled with the attitude that everyone borrows and there are no consequences. Contrast the traditional working class attitude that credit (I.e. debt) was undesirable.

For myself, the self induced pressure to obtain money (called 'saving') was a fear of not having the means to live at an adequate level with food, shelter and basic goods such as a car; through unemployment or old age.

A lack of sufficient money - poverty - is terrible; once you have sufficient, the excess is largely pointless.

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Gary H via mobile

May 27, 2017 at 10:32

I agree you need to have goals, no one plans to fail however, many fail to plan. Its more important today than ever with minimum paid jobs, part time work, zero hour contracts and not forgetting plans for robots to take over many jobs in the future. I agree it's not easy to think about the future, when it's the present that important to the majority. Some even fear to plan, as they don't want to fail with all the uncertanies that exist looking into the future. Your goals can get you over these obstacles if you take the time to plan, and yes of course you may well need to replan if circumstances overtakes events however, you can be the master of your own destiny if you do have plans rather than getting tossed around on the ocean if you don't have a rudder and don't know where you are going. Thinking about what you need rather than what you want right now may help you on your way.Remember your decisions today will be the building blocks to your future.

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Stephen B.

May 27, 2017 at 15:17

"A lack of sufficient money - poverty - is terrible; once you have sufficient, the excess is largely pointless."

That rather depends on what you call sufficient, your aspirations tend to rise as you can afford more. I recently spent about £300 on a work of art - in the past I would have regarded that as a ridiculous extravagance, in the future maybe I'll regard it as ridiculously little ... at any rate, on balance I'd say that owning it does make me happier, even if it's far from essential. (And making a sale probably makes the artist happier too - win-win!)

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Law Man

May 27, 2017 at 16:14

Stephen: a good example. You did not "need" the work of art but, having sufficient surplus money, you bought it for your own enjoyment; and an excellent choice too.


If, as the fruits of our labour, we have sufficient surplus, then use it. As they say "You can't take it with you ..."

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John Griffiths

May 29, 2017 at 09:35

Pursuit of happiness as an end in itself is a fruitless exercise! Happiness is a spin-off from living a good life focused on family values and giving some attention to the good of others. Money is a great help, we should never be defined by nor let it rule our lives. We should manage it sensibly and seek to gain it honestly!

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kenneth douglas

May 29, 2017 at 12:09

My father worked very hard all his life, but we were poor. It did not seem to matter, until I was in my teens, then, many of my friends went to private schools, some families had a car, some owned companies, shops, or were self employed. bit by bit, many of my close friends where no longer close, money mattered and we were poor. I decided I did not like being poor. I trained and even spent 5 years in America for experience and slowly I climbed the slippery pole to Corporate Management. I have had ups and downs, like everyone, fortunately I have a comfortable life style. But even now, in retirement, it is important I still make money, each year, I even do an audit, to ensure we are not over spending, having money is still important to me. That fear of being poor, and the stigma, still lives with me I'm sorry to say.

" You can take the boy out of poverty, but you can't take poverty out of the boy"

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william morris

May 29, 2017 at 19:10

Kenneth, I know exactly where you are coming from. At nearly 70 years of age I can still recall instances from my childhood that have, and still do, influence my attitude to money and saving.

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May 30, 2017 at 16:54

Track your spending. If you don't know where your money goes, it can be difficult to find opportunities to save. Keep track of your spending habits to help identify areas where you can cut expenses.

I use Geltbox Money ( -automatic download from any website (banks,credit cards), high level of security (Your financial data is securely stored and encrypted only in your personal computer),

When using Geltbox you don't need to give your banking account numbers and passwords to a third party.

Geltbox doesn't use any third party Aggregation site (the user can aggregate his own data without exposing private data to any third party /web site).

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