In 1972, psychologist Walter Mischel, a professor at Stanford University conducted a study on a group of children, which is now known as the Stanford Marshmallow Experiment. In the study, a child was given a marshmallow and told that he or she can eat it immediately or have a second one as a reward if they waited for 15 minutes without eating the first one. The researcher then left the room.
In follow-up studies, the researchers found that children who held back their temptation for a second reward had better life outcomes, as measured in the competitive scores, educational growth, physical health, or other such quantifiable measures.
It all boils down to attitude. It is said that attitude is a little thing that makes a big difference. Having control over your impulses and your mind is a key to being a successful person in any endeavour of life. Allowing the mind to lead you through the path of least resistance is the chief reason many people are unsuccessful. Not being successful or able to achieve what one wants leads to negative thoughts that lead to another vicious circle of despair.
Thankfully, not everything is lost. Attitude can be altered and with it, your chance of achieving your dream, whether it is in financial terms or meeting any other goal in life. There’s nothing more powerful than the power of positive thinking. A pragmatic approach mixed with a positive mindset can help achieve your financial goals.
The first step is to identify your goal. You should know in which direction to go before deciding the means to reach there and the speed at which you need to travel.
Here are a few hacks for financial goal setting:
Identify the financial hurdle:
It could be a credit card payment, a loan taken from a friend or a relative, or a debt that is eating away most of your income.
Know where you stand: People tend to either overstate or understate their situation. Being true to oneself and knowing the actual resources in hand is the first step towards achieving your goal. It may not be a good picture, but the one person you cannot misguide is yourself.
Flagging your goals: The next step is flagging the financial goals to achieve. It may start with clearing all your high-cost debts, a house, car, vacation, children's education, among other things. Do not be stingy in flagging your goals. Dreaming big is the first step towards achieving it.
Save, save and save: Most of us meet all our expenses and then save. Try the other way round. Make saving a compulsion, it can be a small amount but get in the habit of saving. After you have saved, use the remaining funds to meet your expenses. Look out for ways to earn more and spend less. Have a frugal lifestyle.
Educate yourself on money matters: Saving is just one part of the solution, where to save is the next part. Saving in a low-interest instrument may not help you achieve your financial goal. Learn the various instruments that can be used to yield higher returns without risking your capital too much. Stock investing is one area where returns can be high, but investing without proper knowledge is a risky preposition.
Monitor your financial path: After mapping your financial goal, it is important to monitor it. Studies have found that the wealthiest people spend around two hours every week monitoring and planning their financials.
Money Buddy: Find a money buddy who can be a member of the family, a friend, or a professional. The aim is to have a third person monitor you and help you stick to the plan. Answering to a third person increases your chance of following the financial plan.
To accomplish any task, you need to stay focused, disciplined and have conviction in yourself. A positive money mindset will help you stay focused, positive and help achieve your financial goal.
The author, Vikas Singhania, is CEO at TradeSmart. The views expressed are personal
First Published: IST