Everyone has something they are trying to reach in life. And when they attain one, another pops up. That is the never-ending circle of goals. Setting a goal is like having a picture of the prize to remind you to stay on track. Goals are where we want to be, what we want to achieve, what we want to have, and what we want to leave behind.
Financial goals are milestones and objectives we want to achieve in how we spend and save our money over a period. While Financial goals are often discussed in terms of our personal finances, it is a principle that also applies to starting and running a business. It is the scale by which you can effectively measure your financial growth as a business.
Financial goals can be long-term goals or short-term goals. This classification is time-based. That is the duration for which you have set to achieve these goals. Short-term goals usually between 6-24months, and Long-term goals are anything after that. It could even be a lifetime financial goal like being debt-free. We must know where to place each goal in order not to end up frustrated in the process. Trying to achieve a goal that should be long-term in 6months/1year will likely lead you down the road of financial frustration. You will think you are not doing enough and have probably failed when it's just that you need more time to breathe.
Example of Personal Financial goals include:
- Increasing personal income
- Becoming debt-free
- Saving for retirement
- Building an emergency fund
- Acquiring fixed asset
- Making a substantial investment
- Increasing your net worth
The best way to set financial goals is to consider the things that are important to you. It will help you remain committed to reaching your goals. We should, however, not confuse the process with the end. Financial planning is the process, the pathway, while Financial goals are the end in mind, the finish line. The financial plan is as important as the goal because it is the plan that leads you there. Many times, people have a good picture of where to go but a terrible map. Carefully take out time to come up with a plan that leads to your goals. Here are a few things to consider to achieve your financial goals:
Create and follow a budget that includes everything you need and allocation things you cannot know yet. The budget has proven to remain efficient in curtailing unnecessary spending. It also allows you to make room for what is necessary and that you might likely forget if not written down. It helps to curb unwanted expenses. Telling people you have a budget is a good way to tell them to back off.
You might say you already have a budget, but it does help to keep records of your expenses. It guides you in preparing your budget. It helps you know how much you have abided by your budget. And it is a better way to track your progress.
Fintech has made it easier to save with automated saving apps. You cannot delay saving and end up spending the money because these apps automatically deduct the money from your account as long as it is funded on your set days.
There is a better way to do everything. You only have to find the right book. Reading books on finance can help you build good financial habits. These books will inspire and challenge you to remain committed to achieving your financial goals. These books also contain tips that help you improve your finances.
Another source of income
Even if your current job pays you well, it is always a good idea to have another source of income. Of course, that means more money, but it is not only about that. Anything can happen to your primary source of income, and it helps to have something to fall back on. It could be for just a short time. You can learn a skill, start a new business, launch a new line of products and services, and you can take up a second job. As the saying goes, do not put all your eggs in one basket.