How to set financial goals you can really achieve?

Setting financial goals and failing to achieve them can be demoralising. But this happens only when you set unrealistic goals. Restrictive budgets, unnecessary sacrifices, etc., make it harder to stay the course while pursuing financial goal planning. You are more likely to quit or lose interest if your financial plan does not align with your capacities. Therefore, it is essential to know how to set goals that are achievable and within your means.

If you are struggling to keep up with your financial objectives, here’s how to set financial goals and achieve them.

Set milestones – Short, medium, and long-term

Setting goals can help you prepare a suitable plan and timeline to achieve them. While setting financial goals, consider categorising them into short, medium, and long-term. Every goal can be achieved with a unique investment approach. For instance, bank accounts are suitable for short-term goals and emergencies as they are highly liquid. IDFC FIRST Bank’s savings account offers up to 7% interest per annum to grow your money over time while serving as an emergency fund. However, equity investments may be more beneficial for a long-term goal. 

Also, fix a measurable target instead of keeping vague financial goals like ‘I need to buy a house’. These goals include planning to save a certain amount (say Rs 25 lakh) to buy a home. Setting quantifiable goals makes it easier to judge your growth and identify errors. Just planning for a house may not give you an accurate idea of how much to save. However, understanding the cost of the house can help you plan more realistically.

Prioritise your goals without following the herd

A penny saved is a penny earned. So try to prioritise your future goals over present-day indulgences like eating out or shopping. You can start saving small amounts every month and slowly increase the monthly amount. Moreover, everyone’s needs and wants differ. So, it is better to clearly understand your individual goals so that you are able to plan for them better.

Many people are compelled to believe that they need to buy a house, a car, etc. However, your goals may not be the same. Your financial goals will differ if you wish to live a life that is different from the norm. For instance, if you look forward to retiring early, say in your late 40s, you would need to follow a different investment strategy than someone who plans to retire at the more common age of 60.

Revisit your goals periodically

Revisiting your goals can be as important as creating them. For example, a long-term financial goal can take years to accomplish. In the meantime, your investment may be affected by market fluctuations, inflation, poor returns, etc. Revisiting your goals from time to time can help you correct any mistakes and ensure that your goals align with your changing needs. 

Conclusion

In addition to the suggestions listed above, it can be helpful to write down your goals and patiently weigh your options to achieve them. It is critical to save money every month and at every age and stage of your life to be financially secure for as long as you live. 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.