In this episode of the Debt Matters podcast, host Wayne Kay speaks with Matt Fader (a Licensed Insolvency Trustee expert with Allan Marshall & Associates) about how to turn your financial dreams into achievable goals. They explore critical topics such as goal-setting, tracking progress, and staying motivated during your financial journey.
Key Points Covered Include:
- Setting clear financial goals: Matt shows how to create clear, well-defined financial objectives and explains why this clarity helps guide saving efforts.
- Using good goal-tracking techniques: Matt shares practical tips on how to track your progress. He also suggests tools you can try, from pen and paper to more complex digital methods.
- Staying motivated: Matt teaches strategies that help you maintain focus (e.g. celebrating small milestones that boost confidence and keep a positive outlook).
- Earning financial flexibility: Matt touches upon the significance of allowing yourself to spend money so you avoid the trap of hoarding.
- Planning your emergency fund: Matt defines healthy emergency savings goals so that you have a safety net in place.
For anyone who needs help making their financial dreams a reality, this episode contains the tips and tricks you need:
Read the Transcript
Wayne Kay 00:04
Financial goals. Turning your financial dreams into goals. How do you do it? That’s what you’re going to learn today on the Debt Matters podcast, where we help Canadians find solutions to their debt with licensed insolvency trustees from all across Canada. I’m Wayne Kay.
We’re going to talk about how do you go about setting goals? Why do you need to set goals? How do you track and make sure that you’re saving money? How do you stay motivated as well? And my guest to tell us all about it is Matt Fader.
He’s with Allan Marshall & Associates Licensed Insolvency Trustee. Matt, thanks for being on the show today.
Matthew Fader 00:41
Good to be here, Wayne. Thank you.
Wayne Kay 00:43
We always have a great discussion, and today is one of those wonderful discussions about financial dreams. And with all that’s going on in our economy, sometimes it might be a little bit hard to actually dream. The dream is to be able to make it paycheck to paycheck.
Matthew Fader 01:01
Sometimes that is the objective, or it seems to be how the majority of people are surviving. Yeah.
Wayne Kay 01:07
Yeah. So we’re going to talk about how do you make that change? I mean, when you talk about, you know, financial dreams and turning those into goals, what is it that you’re actually talking about?
Matthew Fader 01:18
There are these things in any seminar that you go to or anything like that that has to do with any type of goal setting. Says, you know, you have your smart goals, which, you know, um, I forget what the entire acronym is, but, you know, they have to be manageable and attainable, realistic. Um, but the.
The biggest thing that I always find when it comes to goal setting, especially, uh, from a financial standpoint, is you got to be really clear on what your objective is. You know, um, your goals really, really, really, really need a clear definition. Um, not only so that you know what you’re saving towards, but also, it’s also important to know when to stop, because that’s a missing piece sometimes for people. And there’s a certain psychological component to it, too. And when you look and you say, what is a typical goal for somebody when it comes to their financial future?
One of them is to establish a safety net. I want to have x amount of dollars in my savings account. That’s what we’re told. You want to have money, savings account. You want to make sure that if there’s the apocalypse or whatever it is, that you can afford to survive it for three months or whatever it is.
But, I mean, that becomes that sort of starting point in saying, well, what is it? How much do you need in the pot to say, this is what I’m comfortable saving for. So you need to know, what am I saving for? You need to determine, how much do I need? You have to realize that you can’t save up three months salary in two weeks.
So you have to realize it’s going to take a while to get there and not be discouraged by it. You need to know that when you get to that point, you can stop throwing money into it and reallocate it somewhere. And you also have to give yourself permission to spend it.
Wayne Kay 03:22
That’s hard because for a lot of people that haven’t had extra money and all of a sudden they set out the goal and they say, well, I want to actually be able to have this. And they save for a year or two years and they finally hit the goal.
That’s great. Now they have that, but they keep saving a bit more. And the thought of spending it, the more I save, the less I want to spend.
Matthew Fader 03:44
Well, yes, and now that can also be a great thing. Uh, don’t get me wrong, Wayne, because it feels good.
Like, you know, there is that part of saying if I do this properly, if I say, well, I have the objective of saving. Let’s say you have a financial goal. You want to go to Disneyland.
Wayne Kay 04:02
Yes.
Matthew Fader 04:03
Right, right. So we want to go to Disneyland. Okay, well, what does it cost to get to Disneyland if you don’t even have that answer? You’re, you’re, you’re hooped. It’s not going to happen because you don’t know, right. You say, okay, well, here’s my objective.
I want to get to Disneyland. How much does it cost to get to Disneyland? How many people are going to go, what are your park tickets? How long are you going to stay for? Blah, blah, blah, blah, blah.
And you can say, well, that’s all overwhelming. And you say, well that’s fine, but you need to do your research because if you’re going to say for me to go to Disneyland, it’s going to cost me twelve grande. That’s a lot of money. When am I going to just have twelve grand? Well, you’re not, you’re never just going to look in the savings account, say, oh, look, what if you do?
I want your job. But you know, oh, look, here’s a spare twelve grand, let’s go to Disney. It doesn’t work that way.
Wayne Kay 04:57
But I love that you’ve got the focus so like you have. So if you’re just saving money for the sake of saving money, like I was just kind of mentioning, then it’s harder to spend it.
But if you’re actually saving to pay for a vacation before you go on vacation, you’re saving to make sure that you have enough for the down payment for whatever it is you might be buying, maybe it’s a house or you’re saving to buy that second car for six, seven, eight grand, then you, at least you have the goal. So you have to have the goal. How do you go about tracking? What’s the best way to track a pen and paper or just look in the bank account?
Matthew Fader 05:28
Well, that’s where, when you get to that point of saying, this is where I want to be, where you have to then break it down, you have to say, we have to make it manageable. So when we look at that goal of saying, here’s a big one that is well beyond my reach, that twelve grand, I’m never going to have that money. Well, not with that type of mindset. But if your objective is to say, I want to go in five years, okay, if I give myself five years to save that twelve grand right now I’m down to 200 a month. And what once before was unmanageable, unfathomable, I will never get there, becomes a little bit easier because then that’s $50 a week and we can make that unattainable, more attainable. So it really depends on the focus of your goal.
Now, to your point, when I save and I save without direction or when I save without purpose and I start to feel good that I have money in that account, people do get afraid to spend it. They feel good, they feel like they’ve accomplished something great, that money’s there, I don’t want to spend it. I want to keep saving, I want to keep growing. But I have to say, but if it’s useless to you, if you’re not going to spend the money, if you don’t give yourself permission to spend that money, it’s useless to you. So when you say, oh, I have a car repair and I have a savings account designed for car repairs, but I don’t want to dip into the savings and I’ll put it on the credit card, well, that’s ridiculous because you can say, well, I feel comfort in the fact that I have savings, but now I’m paying interest on a payment that I didn’t have to pay interest on and the cost of borrowing is far exceeding what I would have, right? So, you know, and that’s where I say it’s great to be able to define it’s great to be able to work for it, but if you don’t give yourself permission to spend the money, it’s kind of useless to you.
Wayne Kay 07:27
I like that. That’s a great way of looking at it. We don’t often hear about the reward. You know, we’re always hard on ourselves that we have to be doing it this way and doing it that way.
But I like the rewards that you’re talking about here, and that is a good thing. But it also, when you get that family adventure or whatever it is you want to do, it then inspires you to do it again, right?
Matthew Fader 07:50
So 1000%, you’ve proven to yourself that you can do it. And, you know, if anything, the more often you can prove to yourself that you can do something, it becomes easier. You have that foundation and you have that history that you’ve built within yourself to say, these are the things I can accomplish.
And it’s great to feel good about accomplishing something. If you feel good about accomplishing something, guess what happens? You accomplish more. You become more dedicated, more directed, you become better able to handle things that come up to you. And this extends to lots of other aspects in your life.
To say, if we work in small, manageable pieces, we can accomplish more. If we focus on things as a whole, we get overwhelmed. And when we get overwhelmed, we stop doing it. When we stop doing it, we treat ourselves like failures. When we treat ourselves like failures, we fall into unhealthy patterns and chaos subsists, subsews, whatever the word is.
But you get what I’m saying. That’s very much that positive outlook to say. The more realistic I am, the more forgiving I am, the more that I allow myself to do things, the higher level of success that I have, better sense of self actualization I have, the less stress that I have, the more comfort I have, and ultimately, it’s better for your mental well being.
Wayne Kay 09:16
So you mentioned something. You said that if you were to fall down, you’re not saving.
All of a sudden something happens and you have to dip into the vacation fund to pay for the car repair or whatever happens at the house, because there’s always something that happens, and nothing costs a $100. Nothing ever costs a $100 if there’s any kind of a repair anywhere. How do you deal with, I’ll use the word failure, but I don’t ever see it as a failure. But how do you, how do you deal with it when you kind of get knocked off track and then, as you said, all those negative things happen?
Matthew Fader 09:50
Yeah, it is very much a perspective type of thing. We do it all the time when we do budget counseling and we break down your various types of expenses, and when we say, okay, you need to be putting money aside for these particular things, and you’ll have people that, yes, they start to put aside that 50, that $75, just small amounts. But know if we contribute small amounts that we can afford to live without, then we tend to hang on to it. You can’t save more than you can afford to save. You have to be realistic about what you can afford to save. So when we start to do that and we start to see progress and we start to see that account grow, to your point, it’s very gratifying.
And then we have somebody who says, bam, here’s that major car repair, and it just possibly completely obliterated the savings account. That, again, is why you need to give yourself permission. You need to say, what am I saving for? What is that money in the account for? Because if Carr repairs is on that list of the reason why that money’s there, you can then take that money, spell it, spend it without guilt or remorse or anything like that associated with it.
Because you say, well, no, that’s why it was there. I had already sort of spent it in the future. It just hadn’t left the account already allocated it for it. So it is that perception. The perception can’t be on.
The fact of the net results is that there’s zero money in the savings account. The perception has to be that had I not done that work, I’d be walking instead of driving. So it is that outlook and it is that ability or that mindset to sort of focus on saying what’s happening for me, not what’s to me. How can I spin this into a positive so that I can take it as a victory rather than a defeat? Because if we can stay in the right mindset where we’re not being defeated, then we don’t get knocked down.
And it’s really hard to get up when you get knocked down, take it from somebody who gets knocked down professionally, it’s hard to keep getting back up. But the right mindset will make it easier, and those successes help.
Wayne Kay 12:10
And it’s the little things that you celebrate as a success that make all the difference, too. It’s not just big things, it’s little things. And once you start to focus on those, things start to turn around. That’s an important point.
Matthew Fader 12:22
Well, yeah, and that’s a perfect way that you say that is these little things that we have to celebrate and I agree 100%. When you have those victories, when you have those small little things, doesn’t have to be big, doesn’t have to be monstrous or anything like that. We had a small victory. You need to take the time and say, it’s okay for me to pat myself on the back and say, I did.
Well, people are like, oh, well, I have to be humble or not think. It’s like, no, being humble isn’t thinking less of. Yeah. Being humble isn’t thinking less of yourself. It’s thinking about yourself less.
Right. Have to treat yourself properly because the world is ready to treat you like garbage. You don’t need to sign up for that.
Wayne Kay 13:08
Absolutely.
Matthew Fader 13:08
You need to be the biggest advocate. You need to be your biggest ally, and you need to be the one that has that proper mindset.
Wayne Kay 13:15
You mentioned at the very beginning, you said, and when do you stop? And I was thinking, what? What do you mean? When do you stop?
So what were you meant? What were you thinking when you said that? Well.
Matthew Fader 13:27
Well, again, when you’re in a position where you say, I’m saving for something, such as an emergency expense, because these are things that people have in their mind. Okay, I need to have money in case emergency.
Well, first of all, what is an emergency? Christmas is not an emergency, to my recollection. And you can probably agree with me or disagree with me, it happens on the 25 December every year. I almost said the wrong date would have been excellent. But it happens.
It’s coming. We know it’s coming. It’s not an emergency. It’s a defined expense that we can say, we can allocate. We can give ourselves permission for that.
But an emergency expense may be something like, somebody sick, here we are, and something happened to my kid, and I got to take time off work because, yes, I love my kid and will do anything for it. Absolutely. Okay, great. An emergency. I don’t have kids, but, you know, I’m just.
I’m just placating on probably what I would be like if I did, because I’d do it for my cats when I still had them. I assume I would do it for small humans, but either way, the idea is to say, I would need that, and that’s where we can say, okay, well, what do we define as saying that emergency expense is that three months of your salary, so that you could say, if I had to take the time off, I would have the comfort to be able to do it, to be able to operate. Okay, but when you define that as an emergency expense, when you say, this is what I need to have. If you focus on that properly, at some point you’re going to achieve that, because if you’ve identified it specifically as emergency expense, you’ve segregated your funds, which is typically what you want to do. You don’t save in the same pot.
You have to have different places to put it, because if you commingle it, you’re going to lose it. Right. So you set up a bank account, you call it emergency fund. You say, I need $6,000 in my emergency. That’s what I’ve defined.
And you work your guts out and you have your six grand in there. Perfect. Well, you have an emergency fund, but the ultimate goal is for you to never spend that money.
Wayne Kay 15:33
Okay.
Matthew Fader 15:34
Because I don’t want my imaginary child to ever get sick enough that I have to take time off work to look after.
Wayne Kay 15:39
Exactly. Okay, so now you have that. So that’s where you’re saying, stop now start focusing on the next goal.
Matthew Fader 15:45
Correct. Because why would I then pile another five or six or ten or 15 grand and work my guts to grow up an emergency account for money that I never intend to spend.
Wayne Kay 15:55
Yes. Okay. That makes perfect sense. Brilliant.
Matthew Fader 15:59
Because that’s money that in an emergency account, you will not spend on anything else.
Wayne Kay 16:03
Yeah.
Matthew Fader 16:04
So piling additional cash into there is robbing that cash from something else. And that could be that experience. That could be that vacation, that could be, you know, whatever it is that you say, okay, this is the experience that I can take that money, I can spend it on, and you can buy stuff. We have physical stuff, and physical stuff has value in your hand, but experience has value in your heart.
And those are the types of things that you say. I may be robbing myself of that because we rob ourselves of experience.
Wayne Kay 16:40
Yes. Okay, let’s do a quick recap. What do we need to know one more time regarding financial dreams and goals?
Matthew Fader 16:48
Well, you want to define what your financial dreams are as far as your goals are concerned. You do want to segregate. Like, once you’ve defined, this is where I to be, you need to know how much you need to get there. You need to have a place to put that money so that it’s separated from everything else. You need to set yourself a realistic amount to save to be able to achieve it.
You need to give yourself permission to spend that money on other things. If more important things come up, you need to celebrate your successes when you make it through milestones. Keeping things measurable helps if you have kids, draw thermometers or things like that. That you can fill up, you know, so people can see you’re achieving it. Give yourself permission to spend the money.
Wayne Kay 17:32
Love it. Yeah, yeah that’s great, great advice and great information. And when you see that start to grow, you know, when you get that 1st $500 actually saved, that’s an exciting time and then it becomes 1000. It’s just, it’s everything. So I’m really glad you shared all this information with us today on the show. It’s always a pleasure having you on Matt.
Matthew Fader 17:54
Thanks a lot Wayne well once again.
Wayne Kay 17:56
My guest Matt Fader. You can learn more. Schedule a free consultation with Allan Marshall & Associates Licensed Insolvency Trustee through the website wecanhelp.ca and that’s it for another edition of the Debt Matters podcast.
Just make sure you subscribe wherever you get your favorite podcast from. And of course you can always get more information at our website debtmatters.ca thanks for listening.