What are you using / saving your money for, what are you budgeting for? Answers to these questions will be your financial goals. Subjected to one’s values, preferences, wants, needs, life stage, lifestyle and many other factors these goals may vary from individual to individual.
Our financial goals refer to accomplishing the things we rank of importance to us or a lifestyle we aspire to achieve. Having your goals defined sets a planned path to reach them. And in order to reach these goals, we need to make it SMART (like any other goals)
Example:
“I want to clear $50,000 debt in five years.”
“I want to invest $30,000 to earn 7 per cent returns per annum over 10 years.”
“I want to retire with $4,000 a month by the time I turn 65.”
Base on goals above, we can create specific plans, for example, to accumulate $30,000 in three years (36 months), you could plan to open a separate bank account and deposit $1,000 per month in it for 30 months, with a 6-month buffer in case you are unable to save for certain months e.g. if you have an emergency.
Start to portion your pay and work towards your goals. I’ve now going to share how i portion mine in my next post.
