Personal Financial Goals: Why They Are Essential
Whether it is a dream vacation, setting up a fund for your child’s education, saving money for that dream home, everyone at some point attempts to save up for larger expenses that cannot be afforded with current income. How you achieve these goals will depend upon how tangible and realistic your goals are. In addition, constantly keeping track of your progress towards the goal and adjusting them where necessary will help you stay on course
Some important truths about setting important and achievable goals are
If you are single, considering what your future major expenses will be may be difficult but it is never too early to start saving up for a future fund (call it whatever you want)
If you are married, it is critical that your spouse and you agree on the goals you are setting for yourselves. So, in order that this works, you should come up with your goals together, and make sure you both contribute to the goals equally.
The first stage at any point of setting such goals is to figure out what the goals are short-term or long-term.Arriving at an accurate amount is what will determine your success towards your goal and how effective your planning will be.When there is more than one goal to deal with, prioritizing those goals and knowing how long it will take to achieve them will help you to achieve them successfully.
What method you use to save this money will depend on your age, income and risk appetite. It is not impossible to learn to manage your money by saving in various funds. There are many available now that can help you understand how the financial markets work. There are books and tons of resources online which are quite exhaustive. There is also the option of appointing a financial advisor or a planner, who will advise you based on your current situation and your future goals.
What does the planning help you do?
Savings: Whatever you may call it, a fund, an investment or a kitty. They all aim to do the same thing. Putting money away for a rainy day helps you to deal with emergency expenses without the stress. Emergencies and expenses can arrive without announcement and hence it is important to have liquid money with which to deal with these. It is important to consider these and invest such that it can be liquidated quickly if necessary.
Getting more out of your money: You can get more out of the money you earn. It is all about investing it wisely so that you have more when you need it. It is possible and it is being done effectively and efficiently by many people. With a little bit of time and effort, it is easy to learn how and where to invest. Knowing your appetite for risk and understanding what is best for you allows you to gain better control over your money and its growth.
Anyone can save: It does not matter how much you earn, it is possible for everyone to save within what is possible for them. It all comes down to knowing what your expenses are, understanding the difference between avoidable and essential expenses. You should Prioritize the expenses so that they become manageable and possible. So, financial planning can be done by the ones earning by the hour and those that earn many times that.
Coverage: A key part of planning involves providing insurance coverage for you and your family. Uncertainty is the only constant in life and you must be prepared for those scenarios. Investing in insurance or medical coverage buys peace of mind for you and your family. Insurance is a big part of financial planning and if you are confused about what suits you, you should speak with an advisor who can guide you to pick the right policy.
Financial Planning should become an integral part of your lives. By planning your finances, you are guaranteeing yourself a stress-free and happy future for yourself. By involving your family in this process, you will be setting the right precedent for your children as well as they will learn early about saving and setting goals for themselves.