How to Make Your Money Goals Attainable

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Grip Invest
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Dec 23, 2022
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    Make Your Money Goals Attainable

    Money goals can be long-term, short-term, or mid-term in a financial plan. The money - financial - goals are specific and measurable monetary milestones in life that help you achieve a broader financial plan.

    Key takeaways

    • A good money goal and financial planning include short-, intermediate-, and long-term goals setting 
    • Budgeting is crucial to set and achieve money goals of all period terms
    • Money goals must align with financial plans and portfolio diversification planning
    • It is important to spend time thinking about your money goals and planning the ways to achieve them

    What are money goals?

    Money goals are finance-related objectives you want to achieve in life. Earning eight figures in a year or saving Rs. 3,00,000 per month, retiring soon, buying a beach house, or your dream vacation to Switzerland are some examples of money goals.

    There are three main types of money goals you can set:

    • Short-term goals: The goals you’d like to achieve soon, within  three years of time horizon 
    • Long-term goals: The goals you have to plan to achieve in five years to  50 years in the future
    • Mid-term goals: Goals that you would want to achieve, within three to five years 

    A financial plan typically comprises setting short, mid, and long-term money goals that your investment will take care of your immediate, not so immediate and far in future, and ahead in the future financial objectives. As with any goal, financial goals should be aligned with all your plans, whether these plans include putting children through school, maintaining a particular retirement lifestyle, paying off and staying out of debt, or building an emergency fund.

    Budgeting to achieve money goals

    Many of us are aware that the budget can help us with our money goals and financial plan but tend to give it up after a few weeks of trial because budgeting requires sacrifices and the results may not come fast. The problem is, without meaningful financial goals and a budget strategy, it’s easy to get stuck. 

    Budgeting also includes investment planning. As we are aware, good investment planning has not only to align with your income and savings but also with diversification of your portfolio to ensure that high-risk vehicles don’t erode your money and your dreams. On the one hand, you have high-risk, high-return investment avenues like volatile market securities and on the other, you have fixed income-generating savings products like fixed deposits. You must plan the portfolio factoring in risk and return to achieve your goal. 

    Setting money goals

    You cannot set your money goals by just copying the goals of someone else. Setting financial goals is dependent on multiple factors which vary from person to person and not just on the financial means of the person. Your goals align with what you really want in life so that you will be able to sustain it even when the going gets tough. Articulating your money goals considering all the factors that can influence it is critical for your financial plan. When it comes to making a decision on money goals, take some time to write down things you wish to achieve and then work your way down to the smaller things, including something you could achieve as soon as this month.

    Just like you have time frames for your investments, it’s useful to look at your financial goals also as either long-term, mid-term, or short-term. There is no such hard and fast definition about the number of years in each term type or term-based goals, Many of them overlap and are thinly defined. Here are some examples of both short, mid, and long-term financial goals:

    Short-term goal examples

    In addition to your long-term goals, you may also want to set short-term goals for the wishes you’d like to achieve in the near future, such as a bathroom renovation, or a trip to Munnar. According to financial psychologist Dr Brad Klontz, “we need to give our financial goals specific, exciting names that conjure up images and feelings that thrill us.” So, give names or images to your goals so that you can relate to them easily. This applies to all of your financial goals, and not just your short-term goals.

    Some short-term goal examples can be:

    • Build an emergency fund
    • Enroll for an upskilling course
    • Clear credit card dues
    • Purchase a bike
    • Take the family for a holiday to Nainital
    • Renovate a part of your home

    Long-term goal examples

    Long-term goals, such as ensuring financial security in retirement or paying off your debt. Your long-term financial goals can be broken down into several short-term or mid-term goals. 

    Some examples of long-term goals are:

    • Start a small business
    • Live a comfortable retirement life
    • Finance your kid’s higher education without an education loan
    • Own a vacation home

    Mid-term goal examples

    Mid-term, or intermediate, goals may include saving money for paying the premium for an annuity for your lifetime income cover, improving your credit score, or starting your own business.

    Three standard money goals

    While the goals differ from person to person, some goals are common for all families and individuals alike. We have learned from the current crisis the importance of a sound financial plan and how important are these three standard practices in our money management.

    Budget savings than saving from balance: The biggest mistake many people make when it comes to investing is to plan to save what is left after meeting expenses. Prudent investors plan and save first and then spend what is left. That said, one needs to be careful in budgeting both savings and expenses in a balanced manner.

    Pay off debts: Debt is not bad if managed judiciously. You must be careful in ensuring that you don’t end up in a debt trap that will eat up all your income leaving nothing to save and invest. Another important factor to be considered is whether you keep debts that bear higher finance costs than what you earn on your investment. If this is true, pay off such debts before investing.

    Plan future cash outflow: Though the future is unpredictable, what makes one success or failure in money goals is how accurately you can plan your future spending. It’s in times of crisis that we realise the importance of being prepared.You must start preparing your finances as early as possible so that you can tide over the next crisis whenever it may come. 

    Bottom line

    Look beyond conventional market-linked volatile products and low-return savings to balance your portfolio, for innovative products like lease and inventory finance investment avenues which boast of the best of the worlds of market-linked securities, fixed income savings, and passive income-generating products; high-return at nil or minimum risk potentials. Explore your future with Grip which provides non-market linked fixed monthly returns through lease and inventory finance.


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