Open In App

How To Set Financial Goals?

Last Updated : 22 Sep, 2023
Improve
Improve
Like Article
Like
Save
Share
Report

Everything that is a big dream in life usually involves money. A good education, a car, a home, a big fancy wedding, and so forth are examples of financial goals and you can only achieve them when you reach the amount applicable to them. Financial goals are all about your hopes and dreams, a financial goal can be a target that you set for yourself while managing your money. The target could be saving, spending and investing, or anything.

Financial goals can be huge like buying a car or they can be really tiny like setting your own grocery budget every week, it depends on you and how much detail you want to redact it. Some people get very stressed when they think about financial goals, but don’t worry it is not that overwhelming.

Yeah, because you already know what you want, you probably know all your needs, but this need demands another need which is putting the latter onto paper.

Okay, so how do you set financial goals?

Step 1: Write Them Down

It could be anything from your biggest, most unrealistic dream to something that can be achieved in the next few weeks.

Step 2: Sort Them Out

Put them into different buckets which are more realistically achievable and ones that are not.

Step 3: Prioritize

Put a number from 1 to 10, one being the most important next to each goal. This will help you sort them out.

Step 4: Put Them on a Timeline

For every priority, you have to decide a timeline to accomplish it.

Step 5: Put Them Into 3 Buckets

You have to put them into buckets of short-term, medium-term, and long-term financial goals. Your short-term goal has to be under 1 year, medium-term between 1 to 5 years, and long-term above 5 years. Why we should do this? So that we can easily understand when we will need enough and correct investments.

That’s it, this was your 5 normal and easy step process to set your financial goals.

But wait, you might be thinking that it is piece of cake for you to just maintain this process to set your financial goals with planning but that doesn’t turn out with everyone. Some people feel really hard to put them down on paper, even though you know what your financial goals are, so to help you out here are a few examples of how you amassed your financial goals.

Your short-term goals can be creating an emergency fund, paying off your credit card bills, or even going on a small holiday are examples of short-duration goals.

Medium-term goals include buying a car, paying off your personal loans, etc.

But the long-term goals primarily include retirement planning, even buying a house, or getting your kids married at some age.

Okay, so some of the audience tends to be a little young so you might be wondering “who cares about those things which will gonna happen far away in the future, I've just got my first job who will think about family planning and retirement.”

Yeah, that may be a legit concern but don’t worry we’re not trying to be your “Pados Wali Aunty”, who often asks you about your marriage and future. We are just trying to say that you should start thinking about these things generally in life because these are huge things we’re talking about, it requires a lot of planning and time for you to be able to accumulate wealth so that you can achieve these goals in the future.

Also, if you find it difficult to get the right thing with the above process then again you don’t have to fret, we have another succor for you.

The 5*25 strategy

It states that you write down your top 25 goals, next you prioritize them on the basis of what matters to you the most. Lastly, you only focus on the top 5 goals and forget about the rest of them.

Apart from that, you have to keep some important things in mind. Goals change, people change, and circumstances change. It is not every time you stick to the same goal to be accomplished, sometimes they change because you have achieved them.

For example, you have got the down payment money for buying a new car, sometimes they become bigger as you found a new job or you got an increment at your current job, sometimes they change because your family circumstances have changed for example you decide to get married or you have children or your parents retire and they’re dependent on you for income and finally, sometimes they change because you own have changed for example you find a new hobby.

So technically, you have to be aware of your goals which are sometimes vicissitudes, you have to analyze them at least once in six months to a year and update them to your current situation.


Like Article
Suggest improvement
Previous
Next
Share your thoughts in the comments

Similar Reads