From a beach house to a BMW to a trip around the world, there are numerous goals we have in life. Our dreams are what make life meaningful. Most of the time, though, we refrain from dreaming because we believe these notions are unrealistic. However, most desires can be realized by transforming them into goals.
From determining your life goals to using practical tools like an investment calculator, this article shows how to establish financial goals and attain them step-by-step. A couple of steps to achieving your financial objectives:
Determine your life goals
We all share some goals and a few that are unique to each individual. For instance, you would like to operate your restaurant after retirement. In addition to your retirement fund, you would need sufficient initial funds to launch the firm. If you make relevant goals, you will feel more inspired to achieve them.
Be explicit about your objective
Ideas like “I want to save for my children’s education” or “I want to save for a car” are undeveloped. When establishing a financial objective, you must be more detailed.
Be realistic about your capabilities
This logic applies to all. Suppose you wish to participate in a national marathon. While attempting to run the complete 42 km marathon is an admirable ambition, it may be unrealistic for most people due to the physical demands involved. A 10km or possibly 21km distance is more plausible.
Likewise, when determining your goals, you must examine your income and expenses to ensure they are attainable. The purchase of a suburban home in Singapore is a worthy objective, and you may be able to achieve it if you save money and refrain from spending for several years. Something that cannot exist in the real world.
Assign a deadline to each objective
The time frame should be selected intelligently so that it does not become too expensive in light of your existing financial circumstances, but it should also not be so long that it loses all meaning. Retirement and children’s education are time-bound goals. For other financial obligations, such as saving for a house and automobile, it is up to you to determine the timeline for each objective; thus, be prudent. Also, be realistic regarding the time frame. Acquiring a BMW in three years may be overly ambitious if you are not investing a substantial budget.
This is likely the most crucial phase; sadly, most investors do it wrong. As a nation, we like fixed-income products. Thus, regardless of our goals or distance, we invest in fixed income products such as FDs, RDs, etc. Not only do these items have low returns, but they are also tax inefficient.
Use online tools and services
Thanks to technology, the complementary use of online tools and services have been helping thousands achieve their financial goals easier. Budgeting tools allow you to make more informed financial decisions. An investment calculator for instance will help you determine if you are investing enough to reach your goal.
Typically, we lose sight of our dreams because we believe them to be too distant and impossible. However, if we turn these desires into attainable goals, we will be able to realize them. In the case of financial goals, we can achieve them even more quickly by making appropriate investments.