Who does not want to be financially successful and independent? Financial goals are goals we aim to accomplish our financial dreams such as “build a nest egg for retirement”, or “being debt-free”. Studies show people who set realistic goals are far more likely to achieve them. When someone asks you, what is your financial goal, what comes to your mind? Are you stating a wish such as ‘I don’t want to worry about paying bills ever’ or ‘hoping to retire early’? For these wishes to become reality, we need to set clear financial goals. Financial goals require practical steps to achieve results.
Financial goals can be short-term and/or long-term financial goals. The short-term goals are the ones to be achieved in the next 3 to 5 years, while the long-term goals are generally achieved in 5 years and more.
Examples of short-term goals are – saving emergency funds to support you for 6 months, increase monthly savings by 5%, etc.
Examples of long-term goals are – pay off the mortgage, retire by age 55, etc.
Without a financial goal, we could get lured into spending money that otherwise could be used for investment for the future. We might end up spending on things we do not need. We need to switch to saving as much as we can and reduce spending as much as we can. With financial goals, the purpose and drive to save become clear.
Financial goal also helps you determine how to invest your money. Without them, you may not be planning your investments correctly. Long term goals should be prioritized when investing as the compounding effect of investment comes into play.
Figure out your financial goals. Set up your goal with specific, achievable milestones to track. Connect with others in Goalore who can encourage you, provide you information on the goal, and support your journey.