Are you planning to set your financial goals? Read this before you start!
How many of you had planned for financial goals at the beginning of 2020? Almost everyone. But how many of them succeeded to fulfill those goals? Very few as pandemic Corona-19 had badly affected financial planning of almost every family. With the start of the execution of the vaccination program in 2021, things are getting under control slowly but surely. So how to set financial goals in 2021 in a smart manner so that you can club the things left behind in 2020 is what people are looking for very passionately. This post will surely guide you to set your financial goals in most effectively. Understand the importance of the ‘5-Step Financial Mantra’ mentioned below:
- Identify and Set your Financial Destination:
Many of us keep earning without having any financial destination in mind. Thus everyone needs to identify where they want to reach in terms of their financial stability. A financial goal example maybe – A new house in the next 3 years, an investment portfolio of Rs. 10 Lacs in the next 5 years, FD of Rs. 1 Lac at the end of the year, etc. Once you figure out how much you need to reach towards your financial goals, mark it and set it as a financial target or financial destination.
- Find Out Your Expenses:
Only you know how much you earn, how much you spend and at the end how much you save. We are sure very few of us follow the financial discipline to keep track of in and out of each penny earned. It is a must to list out your monthly or quarterly expenses not only for salaried but also for every businessman so that picture of your financial targets can be visible more clearly. You can easily maintain your expenses using an online expense guide or expense manager tools or mobile apps.
- Set your Financial Priorities:
Now you have set your financial goals but to achieve them it is also necessary to set your expense or investment priorities. You must spend your money keeping in mind these priorities to stay on track towards your financial target.
- Invest First – Spend Later:
“If we never invest or save money, we will always be poor no matter how much we earn.”
The above statement reflects the importance of investment or saving over the short as well as long run. Always remember, “Invest or Save First” and try to maintain this habit every month. Fulfill the investment or saving needs first from the money you earn each month and then utilize the remaining funds for your basic needs. Also, keep your pockets ready for any medical or financial emergency.
- Create Multiple Income Sources:
“Never depend on a single income. Invest to create a second one” – Warren Buffet.
Invest in yourself, invest in learning new things or invest to earn more money but never stop working on creating multiple income sources as it will help you reach your financial goals earlier.
Tip: If you run a business, set a separate financial goal for a business different from your personal financial goals.
So At the End,
Financial freedom is more important and a key to it is a person’s ability or skill to utilize earned income smartly. Write your goals down, follow the above steps and see the results.