“Everybody’s got a dream – what’s your dream?” That’s the one line from the hit movie Pretty Woman that’s always stuck in my head when it comes to thinking about money goals and making the life you choose.
We all have dreams. But if you want to make them a reality, it’s time to put a price tag on them.
The older I get, the more realistic I become about how things are going to turn out.
When you are in your twenties, you have this optimistic, if somewhat hazy, view of how well things will play out in the future.
You go through your thirties living like this, until you hit your forties and you realise your mortality.
Funny thing, the number of friends I talk to now who are coming to this realisation is increasing.
For the first time they are starting to think about what life might be like after their kids grow up and they no longer work their day jobs.
The biggest opportunity when you reach this age is to actually plan, based on your experience, what the next phase of your life will look like.
Many do this, however what they fail to then do is to put a cost to it.
One thing you learn in life is that most things have a price. Whether it’s time with your grandkids, or more travel, all dreams cost money.
To cost out the lifestyle you want, and to put a number on how much you need to fund this can be sobering.
It is also the biggest opportunity you have to do something about it while you still have time.
To wait until you are at an age where you no longer have as much control over your earning capacity is, quite frankly, like shutting the gate when the horse has bolted.
In order to work out what money you want to live on per month, how much you want to give your kids, not to have any debt and to have the freedom to live the life you choose – that’s the real opportunity of hitting your forties and fifties.
Here are some steps you can take to work out how to cost your dreams:
1. Think about what you want the next phase of your life to look like
2. How much money will you require to make this a reality?
3. How will you reach and sustain this amount going forward?
4. Build a plan, with simple and realistic steps and milestones to help you reach the price tag attached to your dream.
To help kickstart your money goals, try Financy’s free Money Runway.
