What Are Financial Goals?

Do your pockets ALWAYS get empty to meet “an emergency situation”?

or

Have your long-term debts and financial priorities gotten in the way of your dream vacation?

If that sounds familiar, you’d be surprised to know that there are plenty of others with the same struggles!

72% of Indians are unaware of how much to put aside or invest to achieve financial freedom, wherein a majority agrees on their lack of understanding about financial planning.

Besides this, 65% of women between the age group of 26 and 35 said that they don't know where to start or whom to turn to for financial planning advice.

Understanding financial goal planning is the key to financial freedom. But before recognizing your goals, let's understand personal finance.

Simply put, personal finance is maintaining your money throughout your life. It will drive your decisions, take control of your financial life ahead and decide your journey of becoming either rich or poor.

Really, no exaggeration here!

If you have ever heard successful and rich people talking, they don't talk a lot about their goals, but they usually focus on their journey, their strategies and their approaches that helped them achieve those goals.

After all, only the right processes navigate you to your ultimate goals. With this lesson, we are building tools to help you navigate your equation with money and finally lead you to achieve your goals.

NOW, think about your goals!

Did you just picture yourself driving your favorite car or living in your dream house debt free?

Financial goals could be anything:

1. Paying off debt

2. Saving for retirement

3. Building an emergency fund

4. Buying a home

5. Saving for a vacation

6. Starting a business

7. Feeling financially secure

Circling back, when we think deeply about our goals, we would notice that most of them often end with money and these questions:

"What do I want to achieve/buy in the next 2 years?"

"How do I plan or get motivated to save enough for it?"

"Do I have to cut off my expenses to do so?"

Well, the straightforward answer to all these problems is financial goal planning. This goal planning can be divided into 2 categories, short term and long term goals.

SHORT TERM GOALS

Short term goals have a time frame of fewer than 3 years which might include saving for an emergency fund or paying off high-interest debt.

To get started with this kind of goal, your budget and expenses need to be streamlined. Precisely, you must log everything that you spend during a month, regardless of how tiny or impulsive a purchase it was.

Let's understand by taking an example of an emergency fund. We recommend saving a minimum of at least 3 months worth of your living expenses for an emergency fund.

Example: If your monthly living expenses total Rs. 3,000, your financial goal should be to save at least Rs. 9,000.

LONG TERM GOALS

These goals add significance to your future ahead. Goals with a time frame of more than 10 years are considered Long Term goals.

These could be:

1) Saving for retirement

2) Saving for child's education

3) Managing money to buy a home

For these goals, you need to lay out your personal plan

Here's a handy tip for long term goals: Set aside at least 20% of your monthly income for your savings. This is just the minimum amount recommended, you can surely expand your boundaries. If you are spending more than 80% of your monthly income then you might need to give yourself an intervention.

Amidst all of this, we have good news for you! An autonomous future for your money is on the horizon. And that’s the experience we have built for your personal finance. You can manage your money, track expenses and incomes, understand your spending habits, build emergency funds and create budgets in a go.

Now comes the most major question, "How do we plan these goals if we are not an expert?"

Well, our next blog will walk you through the steps of planning financial goals and how to get the ball rolling to achieve those results. Stay tuned!

For more elucidating and fun bits of financial wisdom, check out our blogs here and for growing your wealth, start your journey from here.

Take control of your Personal Finance Planning and Wealth Management, Download and Install Finzard — Your Personal Financial Wizard from Google Playstore.

For more information: www.finzard.com

Written by Gouri Chowbey for Finzard