ARTICLES

Goals are the tasks you wish to accomplish.

These goals might be certain dreams that you might have like going on an international vacation, the basic financial obligations like buying a house etc. When it comes to managing your finances, identification of your financial goals is the first and the most basic step.

What are financial goals?

Financial goals are responsibilities that individuals have in their lifetime. These goals require a corpus for fulfilment for which you save a part of your hard-earned income.

Why are financial goals important?

Saving money is the inherent nature of many individuals. Whether you are an earning member or not, if you have funds at your disposal, you might save a part of them for future use. But what is the use of such savings?

Here’s where goals become important. Financial goals are your responsibilities for which you need to save and create a corpus. Identification of your goals is important to find out –

• What to save for?

• How much to save?

• For how long should you save?

When you know your goals you can plan your finances and pick the right investment avenues. Saving without having your goals in mind is like travelling without a destination. Just as the trip would land you nowhere, your savings would not prove useful unless they are allocated to your financial goals.

Different types of financial goals

While different individuals might have different financial goals, some goals are common as follows –

• A home: Almost every family wants to live in a house that they can call their own. As such, buying or constructing the dream home is the financial goal for every individual who doesn’t have a property in his/her name. 

• Having a car or a bike: People looking for easier modes of commute plan to invest in a car or a bike. Since buying these vehicles involves money, this becomes a goal for many.

• Child's future planning: Parents want to build a corpus for their child’s future, whether it is for higher education, international education or marriage. It also involves providing Financial Security to the child. Financial security means knowing that your child would have access to an optimal corpus that would help him/her fulfil their dreams of a good education and career.  Click here to read more about Child Education planning.

• Retirement planning: Retirement means an end to an active source of income. As such, you need to create a retirement corpus that would help you live out your golden years in comfort. Click here to read more about Retirement planning.

• Estate planning: Many individuals plan to leave behind a legacy for their loved ones. That is why they aim to create assets in their name which can, later, be allocated to their family members. 

How to plan for your goals?

Irrespective of the financial goals that you have, you should plan for them wisely. Here are some tips on how –

• Identify your goals,

• Prioritise them, i.e., identify their time horizon and list them in ascending order,

• Save and invest regularly,

• Earmark your savings to individual goals,

• Track your investments and review them to ensure that they are sufficient to meet your goals.

When you begin your financial planning journey, start with your goals. Identify them and then create a plan around them so that you can fulfil your goals as and when needed.