Financial goals are monetary savings, business investments, or spending limits you set for your income in the hope to achieve financial independence over a specific period of time. Your age and your societal status determine the type of your financial goals. For instance, a school-going kid mostly saves money for a new pair of branded shoes, while an adult professional is more likely to save money to buy the latest model car. Financial goals vary with individuals as well. While you plan to invest in a new business, your friend may be saving money to buy him a new home.
Today, if you lack a financial ambition or a financial plan, you are already traveling on the path towards your inescapable penury. Any person who values their hard-earned money and a very limited resource like time would have a financial plan for their future. They always have a few financial ideas lingering in their minds and they set their monetary assets in constant motion churning out more profit and savings for further investments.
Some of the major common financial goals are as follows:
Whatever may be your financial goals, the methods apply to set and achieve them is always homologous. Clearing off your debts should be the priority when you set your plans to achieve your financial goals. The interest incurred on your debts like credit card or other financial liabilities can eat away a great chunk of your cash flow.
Your assets and revenue determine your wealth. Apart from saving, a person with clear-cut financial ambitions should develop multiple-income streams to augment his wealth. Multiple-income sources don’t mean working extra hours or doing any part-time job. Opportunities are plenty today to monetize your passion or kickstart a side hustle that can provide you with more revenue and leisure.
With a little common sense and patience, you can set and achieve your financial goals without relying on a professional financial planner.
The SMART method – an acronym of Specific, Measurable, Achievable, Realistic, Time-Bound – is one of the most efficient ways to achieve your financial goals without many hiccups and headaches.
Write it down! Penning down your goals, whether it is financial or life goals, gives life and vigor to your mission. Occasionally taking a glance at your written goals will prompt you to prioritize those goals and push you to achieve them in the nearest future. Always remember to place your financial goals into three categories: short-term, medium-term, and long-term.
Short-term goals might include buying a new smartphone or paying off credit card debt. A list of medium-term financial goals can include purchasing an automobile or paying your college fee. Buying a home or retiring with enough money to lead a comfortable life constitutes long-term goals.
Once you have identified your specific financial goal, it’s time to quantify it. Bring every aspect of your financial plan -- be it the targets, time span, personal preferences, or every resource including finance -- to the weighing scale. Keep in mind that if you can’t measure your financial goal, chances are little that you could achieve it. It is also applicable to every goal you set in your life.
Always set an achievable financial goal within the limits of your savings. Living below your means is the simplest way to amass more savings. If you spend more than your revenue, you create debt. And savings lay on the other side: spending lesser than your revenue. Never lead a lifestyle you can’t afford. Always remember to lay out a financial plan that focuses on achievable financial goals in the short-term, mid-term and long term.
The world of money is filled with economic uncertainty and technological disruption. From budgeting to creating revenue sources to monitoring your financial performance, always keep a realistic mind. It can ward off a great deal of frustration when your financial ship gets caught in whirlwinds that can short-circuit your financial ambitions. If something goes wrong, take time to reevaluate your financial plan and get back on track.
If your financial goal lacks a timeline, it is more or less a mere wish, not even a goal. Prioritize your goals and set a timeline. Then concentrate all the savings, and other additional resources in the pursuit of that financial goal. Focus primarily on easier steps or targets in the process. The accomplishment of easier targets boosts your confidence and motivates you to achieve more difficult benchmarks in the process.
Apart from the SMART method, there are some more ways to achieve your financial goals. Let’s have a peek at them.
A Financial Goal Chart
This is one of the old-fashioned visual stimulus methods used to achieve your objectives or goals. Human minds believe things that can be seen or imagined. For instance, a photo of yourself during your college days can motivate you to shed some weight and look younger. Similarly sticking a financial goal chart to your wall or set as your desktop wallpaper can help you to achieve your financial goals in an effective manner.
The digital world offers plenty of mobile applications that can keep you on track with your financial goals. Financial applications, both free and paid ones, constantly poke you to move forward towards your financial goals with alerts and notifications. Most of these financial applications not only lay out a good road map of your financial goal but also motivate you to take the next step after you achieve every single target on the way.
Reward works even in the world of finance. If you can successfully achieve each target, big or small, in your journey towards your financial goals, never hesitate to give yourself or your well-wishers a little treat. It motivates you to achieve greater targets in your future financial journey. It has been a psychologically established fact that if you disclose your goals or ambitions to your family or friends, you are more likely to take action to achieve them.
A Diversified Investment Portfolio
Without an aggressive investment portfolio in place, you won't be able to grow your wealth with just your savings. A diversified portfolio however will help you mitigate troubled times, market risks, and changing economic conditions. You can build an ideal portfolio by having a good mix of low-risk & high-risk investments. Alternative investment platforms like Grip also give you a wide array of non-market linked investment products to invest from. You can start investing from as little as INR 10,000 and get pre-tax returns worth up to 22%.