Set your goals and prioritize them for financial success!
It is very important to set your goals when it comes to finances. Just like you draw budgets every month, by planning to achieve a certain saving target every year will also be fruitful.
In every person’s life there are so many phases of life that you need to plan for like children’s education, retirement, holidays, buying a house and other major expenses. Also there are some whishes and dreams like taking an international vacation, buying a holiday home or even a fancy car. All these can be done by proper planning and with the help of financial management tools.
But, what if you have already set up your goals and don’t know where to start?
Well, in this case you’ll have to prioritize them in order of importance. This is a suggested order considering the financial planning pyramid:
Set your goals related to:
- extra income,
- debt management,
- life, health, disability, property and liability insurance, critical illness,
Set goals related to:
- retirement fund,
- emergency fund,
- home ownership,
- education fund,
- regular savings (saving accounts, certificates of deposit)
Set your goals related to investments in:
- mutual funds,
Set goals related to investments in derivatives like:
- real estate,
Set your goals related to wealth distribution
As we mentioned this is only a suggested prioritization that mainly depends in which stage of your life you are.
Don’t forget that this isn’t a once in a lifetime task. On the contrary is a very dynamic task. There are several strategies available that can help you achieve to manage your goals in the SMART way.
For example if there is a certain vacation plan you have and you see that you are not able to save for it, then you should make it your goal. Budget for the proposed holiday before hand and then take a financial analysis of your financial situation. See how much you can put away for that holiday and you will get your time line.
Every time you set a goal and is followed by a time line then the goal has to be achieved within that time. Only then your approach to achieve your goals will have a direction. By using a directional approach you can divide your expenses accordingly and also save meaningfully for a purpose that you want to fulfill. By using goal setting procedures you also derive a greater amount of satisfaction when you achieve your goals.
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