How To Set Your Financial Goals
Whenever the term financial advice is mentioned it is commonly associated with an individual’s financial goals. Whether you have a type of Christmas list as long as your arm of things that you’d like to buy, or perhaps you’ve never really thought about it and just buy what you want when you want a financial goal is almost always at the forefront of your mind, you just might not know it yet.
Having a financial goal is a fantastic step in the right direction when attempting to take control of your finances. Goal setting will not only help to motivate you to make the necessary sacrifices in life, it will also act as a self-reward system, set your goal, achieve your goal then treat yourself and start again!
In order to achieve your desired results it’s sensible to map out how your goals can be achieved whilst you maintain your day to day life. MoneyTalk Magazine suggests creating a hierarchy of goals to cover your life span in order to understand how to prioritise and remain realistic. These should consist of three clear cut categories, explained below.
Short Term Goals: Achievable in one to two years
These will be your fun goals! Have you been craving a getaway to Fiji, do you want to take a month off work in two years and travel Europe? Do you really want a new laptop? Maybe your living-room needs re-decorating? These types of goals have relatively instant pay-offs, you can save up, buy and then be happy with your purchases. Short term goals are usually things that you really want, and could probably buy on credit if you were being impulsive. But hold off! Add a little patience to your life and it will be enjoy the satisfaction when it comes.
Medium Term Goals: Achievable in three to five years
The items designed for medium term goals are usually worth a considerable amount more than those short term goals. You might need a new car in five years, or you kitchen and bathroom will need updating. By recognizing what you know you’re going to want in three to five years now, you can do yourself a favour and start saving early. Save a slice of your income every month into an account that’s not easily accessible to you.
Long Term Goals: Achievable in five years plus
The ultimate goal for most people should be to retire from work with no personal or non-investment debt. Perhaps you’re planning on travelling the world in your retirement? Do you want to own multiple properties that will generate an income replacement in your later years. Whatever it is that you desire, you need to imagine what you’ll want and what you’ll need, then plan how you’re going to achieve this. The sooner the better.
A financial Adviser would be more than happy to discuss how to help you set your goals, simply contact our office to arrange a chat.
Source: MoneyTalk Magazine, Dec 2016