The importance of setting financial goals
No matter which stage of your life you may be in but setting financial goals is of prime importance. You must know that you would have a much better chance of reaching your financial goals if you set them and write them down. We at “The Accounting and Tax” have been into financial consulting since long and through this blog will try to explain you the important goals and also help you do the same.
The initial steps of setting up your financial goals
A financial goal has to have a date attached with it. It is often said that a goal without a date is a fantasy. So you need to set a date against all the financial goals that you want to achieve. Your financial goals need to be further be classified into short term goal, midterm goals and long term goals.
- Short term goals
These are those goals which you want to achieve immediately in the short term. These could depend on your priorities. These may include paying on the balance amount on your credit card. It could also mean other short term goals like setting up an emergency fund. It could be goals like buying a new computer which may not cost you a whole lot but need some planning for acquiring the same.
- Mid Term goals
These are those goals which you might want to achieve in the mid-term. Generally, these are the goals of buying a car. It might also be the goals like taking a vacation and even clearing your debt, depending on the quantum of the loan involved. Midterm goals vary from person to person depending on one’s personal priorities.
- Long Term Goals
These are those goals which are long term in nature. It involves a considerable amount of time in achieving them. These long term goals may be goals like planning your retirement. It could also mean things like buying a home.
Once the financial goals have been set you need to track them on a consistent basis. You need to assess your progress. In case you are not totally happy with the same you must have an alternative plan and change your course accordingly. Achieving your short term goals are very important. The reason is that once you have achieved them you would get the confidence to achieve more and thus work accordingly.
Once the financial goal is set you need to set up a plan of action. You need to work as per the plan decided upon and try and understand what you need to do more to achieve the financial goals you have set up. It is best that you keep achieving your short term goals. The reason is that this is what will keep you motivated to achieve the mid-term and long term goals as well.
You must work out on your sources of funds which would help you achieve your financial goals. For e.g. you must determine how must determine how much you need to save per month to achieve your goal and so on.
In conclusion, we hope that we have been able to help you understand the importance of setting financial goals and how to achieve them.
