Financial goals are monetary savings, business investments, or spending limits you set for your income in the hope of achieving 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 save 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. People who value their hard-earned money and a 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:
- A budget creation
- Pay off credit card debt
- Set up an emergency fund
- A retirement savings plan
- Professional skill development to increase your income
- Save money for a college education
- Improve your credit score
- Clear off your student loan burden
- A business investment
Whatever your financial goals, the methods applied to set and achieve them are always homologous. Clearing off your debts should be the priority when you set your plans to achieve your financial goals. The interest incurred on debts like credit cards or other financial liabilities can consume much of your cash flow.
Your assets and revenue determine your wealth. Besides saving, a person with clear-cut financial ambitions should develop multiple income streams to augment 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 some common sense and patience, you can set and achieve your financial goals without relying on a professional financial planner.
It's Time To Get SMART
The SMART method – an acronym for Specific, Measurable, Achievable, Realistic, Time-Bound – is one of the most efficient ways to achieve financial goals without 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 glancing at your written goals will prompt you to prioritize them and push you to achieve them soon. 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 fees. 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- the targets, time span, personal preferences, or every resource, including finance- to the weighing scale. Remember 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 less 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 additional resources to pursue that financial goal. Focus primarily on easier steps or targets in the process. Accomplishing easier targets boosts your confidence and motivates you to achieve more difficult benchmarks in the process.
Some More Tips To Achieve Your Financial Goals
Apart from the SMART method, there are 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 college can motivate you to shed weight and look younger. Similarly, sticking a financial goal chart to your wall or setting it as your desktop wallpaper can help you achieve your financial goals effectively.
- Financial Applications
The digital world offers many mobile applications to keep you on track with your financial goals. Free and paid financial applications constantly poke you to move forward toward 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 Yourself
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 psychologically established that disclosing your goals or ambitions to your family or friends makes you 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 with 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 inflation-beating pre-tax returns.
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