Setting financial goals in advance will let you determine where you want to go and how you are going to achieve your financial aim in life. As everyone is different and has their own financial goals, we suggest you not to follow others. Instead set your own financial goals according to your own priorities.
Today in this article we will let you know how to set financial goals for your future.
First thing you need to ask yourself is what is your priorities and how much money do you need to achieve it. Then try to find out by putting those priorities into short-term, mid-term and long-term.
By defining your long-term, short-term and mid-term financial goals, you can easily know how to organize things and start saving more money to achieve it.
Prepare an excel sheet with columns like goals to achieve, funds required, monthly saving to achieve your fund’s requirements, additional funding if possible. By doing this you can have an idea to know how difficult or easier to achieve your financial goals.
In short-term financial goal, you have to include those things that can be easily accessible within next year. You can include option of putting money in a saving account or investing in equity market or mutual fund or recurring deposit account.
In mid-term financial goals, you can set your goals for 2-5 years and funds investment in fixed deposit, recurring deposits, SIP schemes, real-estate, KVP and NSC. When you achieve your target we suggest you to take out that amount and keep it in separate saving accounts with swap in recurring deposit scheme by which you can withdraw it at any moment of your requirements.
In long-term financial goals, you need to keep savings for more than 5 years for those goals which you want to achieve after 5 years from now. Examples of long-term financial goals can be for children’s education or marriage, buying your own house or retirement plan.
For these kinds of goals, you need to first define your risk taking capacity. If you are less risk taker then we suggest you to invest in a public provident fund or PPF scheme or endowment life insurance policy. If it’s possible we suggest you to start investing in real-estate. If you are high risk taker then in addition to these investment options you can try mutual fund or investment in share market.
Based on your financial goals and obligations, you need to set aside certain amount each month to help you reach your target. If your goals are not possible to achieve with your present income then try cutting down certain unnecessary expenses or try to earn more by diversifying your income streams.
Please remember, setting financial goals is the first step towards financial success. To achieve financial success, you need to have a proper plan of action.