As kids, we always thought saving up was the only answer to achieving something in life – whether you wanted to buy a new bike or just go on that camping trip with your friends. Our little bank always seemed to be the answer for everything. But as a grown-up, do you ever feel like you are just not making any progress with your money no matter how hard you try? And even after years of trying to save, you are still unable to save up enough to flaunt something?
Well, that is most probably because you have not set any financial goals for your present and your future. You are just spinning the wheels in a repetitive cycle every day without any idea how to save up or grow your money – and this is where things go downhill financially.
If you want to turn your dreams into reality or simply just want to build a comfortable future for yourself and your family, you need to prioritize your financial goals. And if you have no idea how to do that, we are here to guide you. Just keep reading!
What are Financial Goals?
Financial goals are your investments, savings, and targets regarding the spending that you want to achieve over a set period. In layman’s terms, they are goals that help you decide what you want to do with your money and how you plan to do that.
Financial goals depend on a lot of things – from how much you manage to earn on a monthly or weekly basis, to the amount you manage to save from your income. But most importantly, they depend on the stage of life you are in. This also means you are never too late to set financial goals for yourself.
Types of Financial Goals
Financial goals are a step towards your financial security, and there are 3 types of financial goals that can help you achieve this at all stages of your life. Hence, considering your financial needs and your future plans – you must set short-term, mid-term, and long-term financial goals.
1. Short-Term Financial Goals
Short-term financial goals are the first steps toward achieving long-term financial stability. They help you give a confidence boost and a foundation to set your finances. They are easy to achieve, and you can start by setting short–term financial goals right away.
- Sit down and establish a budget – track your spending and start saving up a certain amount.
- Create an emergency fund for yourself and your family to make sure you are covered for unexpected expenses
- Pay off your credit cards and ensure you are not paying extra due to piled-up credit card loans.
2. Mid-term Financial Goals
Midterm financial goals are a bridge between short-term and long-term financial goals. Once you have set your budget and paid off your credit card bills, it is time to start working toward long-term goals by meeting midterm financial targets.
- Get life insurance – it helps a lot when you have a family that specifically depends on you.
- Try paying off your student loans as soon as possible – they can be a huge drag on your monthly budgets.
- Start planning for your future dream (for example, your house, or a car or some business you want to invest in)
3. Long term Financial Goals
Long-term financial goals are goals you set for your future, specifically after you retire. This is the time when you want to relax and have enough saved up for yourself.
- Estimate how much you will need for retirements – such as your desired annual living expenses and overall budget
- Estimate your retirement assets minus your income and expenses
- Start financial planning toward it from today
Set SMART Finacial Goals
Financial goals are important for everyone who wants to lead a financially stable and successful life. Like all other goals in life, your financial goals must be “SMART,” and by SMART, we mean they should be:
Don’t forget these important factors when you are setting your financial goals. No matter what stage of life you are at, you must set SMART financial goals for yourself and your future.