How to Set Your Financial Goals Correctly

financialtreat – will explain How to Set Your Financial Goals Correctly that you will get in the following article. Let’s look at this article carefully!

Financial goals – In life, you must have desires that you want to realize both in the short and long term. To realize this desire, you need to strategize. Thus, all the attitudes you do will be more purposeful and focused to realize these desires.

Likewise in terms of finances. Financial goals are targets that want to be achieved, to make it happen requires a considerable allocation of funds. Examples are owning a house, marrying at their own expense, having a good salary, and sending a child to a good school.

What is a Financial Goal?

Financial goals are planning that requires the preparation of funds within a certain period of time. For example, if we want to get married in the next 3 years, then now we have to calculate the funds that must be spent to organize the wedding.

The planning is not limited to the cost of endorsements and parties, but also must prepare household funds that are the beginning of real-life after the party ends. You don’t want to, right, live miserable for some time after marriage because you spend too much money on the wedding party alone?

Financial Planning Goals for Your Life

Protecting Assets

By creating a financial plan, you will divide the income received for several needs. For example, expenses for daily needs, electricity costs, paying debts, investments, and so on.

Making financial planning will also make it easier for you to save. Saving in this case is not only saved in the form of money but in other forms, such as property or gold.

There are many investment instruments to choose from. Starting from gold investments, property, deposits, mutual funds, stocks, and so on. Before choosing one of the investment instruments it is advisable to find as much information as possible about investments.

Avoiding Anxiety

If financial planning is made mature and neat, it is very likely that all current and future needs will be handled properly. Having a lot of savings and investments will allow you to enjoy life in the future without a lack of money. In addition, good finances will make you avoid anxiety because you do not have money and emergency funds.

Achieving Long-Term Goals

Many people have long-term goals in their lives. These goals such as buying a car, buying a house, financing children’s education, hajj, holding weddings, and so on.

These goals are important to achieve but to achieve them must be by making financial planning. Financial planning must be made well and routinely so that the planned goals can be achieved.

Protecting the Future of the Family

The purpose of further financial planning is to protect the future of the family. The financial planning made already includes a safe and secure future for the family. Savings and investments will be valuable assets in the future, especially when facing difficult times such as the current pandemic.

  • Types of Financial Goals
  • Short-term Financial Goals
  • Medium-term Financial Goals
  • Long-term Financial Goals
  • Short-Term Goals

Short-term goals are immediate goals that you set for yourself to achieve larger long-term goals. You can think of short-term goals as achievements or stepping stones.

Short-term goals usually exist in a short period of time, ranging from days or months to a year or two. Examples of short-term goals may include completing a small task or project, gaining experience or taking classes. You will use what you achieve in the short term to complete your long-term goals.

Medium-Term Goals

Medium-term financial goals have a time span of between two to ten years. One example is preparing money to finance quality education for children. Investment options for achieving medium-term goals are in different instruments with short-term goals.

Long-Term Goals

Long-term goals are usually big goals that you want to achieve for a few years. You will use some achievements to achieve long-term goals, setting short-term goals to achieve them along the way. Long-term goals may include getting a job in a particular career, being promoted to a certain level, or completing a long and complicated project.

How to Set Financial Goals

Make a List of Financial Goals you want to meet

The first step you have to do is to make your financial goals clear. So that this step can run perfectly, try when doing it do not to be depressed let alone stressed.

What are your top three priorities right now? Buying a house? Opening an investment account? Pay an education loan? Or even all three? Write down existing goals to make it easier for you to achieve these financial goals.

By writing down financial goals. You can prioritize which is the most urgent or should get attention first. So that the distribution of funds can be appropriate in accordance with payment needs.

Realize Your True Motivation

Motivation to achieve something should be intrinsic, not extrinsic. Intrinsic motivation is the motivation you have for yourself. For example, I want to raise an emergency fund because everyone does, another example is, I will raise emergency funds because if I am laid off at some point even if it is not my fault, I will still be able to live by being a freelancer.

While this example, I had to pay my credit card because my wife kept yelling at me, was an extrinsic motivation. When compared to this, I will pay my credit card, so that I can be financially secure, it is an intrinsic motivation sentence. Well, you already understand the difference, right?

Creating Specific, Measurable, and Challenging Goals

It would be better if you have a clear, measurable goal, and require you to rise up in response to a challenge. For a goal to be truly achieved, your goal must be realistic. You also need to give yourself wiggle room.

For example, someone who is dieting, has the motivation to lose weight between 2 and 4 kg. While the other type decided to lose weight as much as 3 kg. Clear goals will help make it easier for you to achieve what you plan through related activities.

Visualize the Entire Trial Process

You already have a specific goal in mind, but how do you achieve it? That is by visualizing the experimental process to achieve this goal. Researchers have shown results that this would be better than just devising visionary goals. Also, be aware of the experience of different triggers and the emergence of new behaviors.

Evaluating the Budget

This planning will not work when you yourself do not have real funds or money. Therefore, you should evaluate this cost or budget from two points of view. The first point of view is to multiply the take-home payment by 0.2.

Why 0.2? 0.2 or 20% is a good rule for how much funds you have to raise to achieve that financial goal. Second, look at where the current costs are most likely to be taken.

Examples of Short-Term Financial Goals

Short-term financial goals can be in the form of collecting emergency funds, paying credit card bills, and preparing for wedding funds.

Examples of Medium-Term Financial Goals

Medium-term financial goals have a time span of between two to ten years. One example is preparing money to finance quality education for children. Investment options for achieving medium-term goals are in different instruments with short-term goals.

Also, read Wealth Management:

Examples of Long-Term Financial Goals

Long-term financial goals usually have a period of more than 5 years. Some examples of long-term financial goals such as pension funds, home purchase funds, hajj preparation funds, children’s college fees, and others.

Are You Ready to Make Your Financial Goals?

Managing finances is not as difficult as imagined. You only need to practice to be able to get used to determine your financial goals in order to match expectations and in accordance with what you plan for later.

Therefore, let’s make financial goals so that life is more organized and clearer to welcome success in the future. Thus the article I can make about financial goals is hopefully useful, thank you.

3 thoughts on “How to Set Your Financial Goals Correctly”

Leave a Comment