Three steps for Achieving your Financial Goals!
We all have a set of goals made up for a life of our dreams. Some of the goals don’t involve financial matters in it. But usually most of them do! Money is what keeps the cycle running. But, you achieve the goals set for your future only if you learn from the mistakes and plan a more effective strategy. Here is the most basic and effective three-steps-strategy to achieve the financial goals you must have set for yourself.
Sometimes if you have financial restraints, it’s a benefit. It helps you come up with a more creative way! –Robert de Niro
Step one- A Clear Picture of your Financial Wants and Needs
This is the most important step, because this step is where the rest two are dependent on. First of all what you have to do is figure out the main goals of your life that you want to achieve. Forget about priorities for now. Just list all of them down. Let’s say the main ones are ‘getting married’, ‘children’s education’, ‘retirement plans’. And then there are certain things you want from life like a new house, a car, a lifestyle that you want for yourself.
Now, set deadlines for achieving these goals. Like, in how many years would you like to get married? Exactly how many years later your child could be attending the college? When do you plan to retire? Not to mention that you need to keep in mind the expenses related to all these events.
Next, take it in reverse and calculate how much do you need to save in order to end up with that bank balance after those years. For example, you estimate that in the period of 20 years you’ll have to save for your child’s education. How much do you need to save every year/month in order to end up with that amount? Same goes the case with your retirement plans and your Dream Home!
Now, this calculation may end up being quite overwhelming as what you’re supposed to save at the end of it is clearly not possible for you today! So, all you need to do now is prioritize! Now, no matter what your other goals are, your retirement savings should be the first on your priority list. Then, pick the other goals that you can start saving for, based on their priority and their place on the timeline.
The advantage of figuring out the goals like this is that it’ll give you a push to come out of your comfort zone and really work for a better future. You’d realise that the best time to work for your future is now, and every day counts!
Step two- The Learning Phase
Knowledge brings wealth, and the better knowledge of surroundings only helps how to preserve it! Once you build the strategy, you need to look around for components that’ll help you achieve it. You need to be well-aware of the Tax deductions that you can claim, the investment plans most suitable to your financial situations and priorities at the time. You can also take professional help to understand your financial matters in the beginning.
Step three- The Execution.
After understanding the financial matters that you have to deal with, you need to put it into action. You need to allocate the assets that you invest in on the basis of different asset classes. Your financial decisions take place on the basis of your age, risk tolerance, time horizon and other relevant factors. The ideal mix of these assets gives the highest amount of returns, on the basis of risk you’re willing to take.
On top of it, you can’t just put it into action and then forget about it. You need to keep a check on the status time-to-time. You can alter your investment schemes if necessary.
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