How to set and achieve long term and short term financial goals
From a financial perspective, where do you see yourself five years down the line? One perceives that one is going to be financially stronger 10 or 20 years down the line, but these answers aren’t specific.
Being vigilant about one’s financial goals puts one in a better position to achieve the same. Let us take a look at a few tips towards achieving the same:
Jot down your goals
Your financial goals are likely to be in the form of planning for kids’ education or planning for retirement. By jotting down the goals, one begins to add substance to their realization. The goals then begin to induce motivation within one, and the simple activity transforms one’s dream, such as buying a house, into a goal. Planning out the details is hence simplified.
Categorize and prioritize
It is important to define a timeframe for your goals and categorize them accordingly. As an instance, the financial goals to be realized within three years are short term, and beyond 7 years, they are long term.
Following the categorization, one is in a better position to create a roadmap for the achievement of the goals. One can then categorize one’s goals based upon what is important for one, and what one would be more willing to let go. The information comes in to be particularly handy when one is in a deficit.
Define a target date
Defining a target date helps one be financially capable at the pre-designated time, to work towards the achievement of the goals. Even while the actual materialization of the goals is delayed, one will at least be financially prepared at the requisite time. The activity gives a psychological boost for an individual and lets him be sure regarding his finances.
Have an estimate of the expenses involved
One should make amendments for the future, wherein the cost of everything is likely to be a shade higher. So, one should make room for inflation in one’s goals, irrespective of the goals.
The amount that one should be saving
It is first important to figure out the value of the goal in the future. This puts one in a position to define how much he intends to invest towards the goal.
Even if the initial investment towards the goal is meager, one can increase the contribution as one starts making more money, or gets promotions or incentives.
Budget your savings
Budgeting one’s savings initiate with understanding how much one needs to invest towards each of one’s goals. When one starts making requisite savings every year, the goals come closer to materialization. When one practices financial goal setting in life, it soon becomes a way of life.
It is okay to take the help of a financial consultant for a financial goal setting. Such an entity would be in a position to guide you towards the feasibility of the goals and would offer sound financial tips that will work towards the achievement of the goals. This may be in the format of the various long term and short investment options available before you, that you can select based upon your risk tolerance levels.