16 Dec How To Set Financial Goals
Whenever the term financial advice is mentioned it is commonly associated with an individual’s financial goals.
Whether you have a ‘list’ as long as your arm of things that you’d like to buy, or perhaps you’ve never really thought about it and just buy what you want when you want – financial goals are almost always at the forefront of your mind, you just might not know it yet.
Having a financial goal is a fantastic step in the right direction when attempting to take control of your finances.
Goal setting will not only help to motivate you to make the necessary sacrifices in life, but it will also act as a self-reward system, set your goal, achieve your goal then treat yourself and start again!
In order to achieve your desired results, it’s sensible to map out how your goals can be achieved whilst you maintain your day to day life. MoneyTalk Magazine suggests creating a hierarchy of goals to cover your lifespan in order to understand how to prioritise and remain realistic.
These should consist of three clear cut categories, explained below:
Short Term Financial Goals – Achievable in 1 to 2 years
These will be your fun goals! Have you been craving a getaway to Fiji, do you want to take a month off work in two years and travel Europe?
Do you really want a new laptop? Maybe your living-room needs redecorating? These types of goals have relatively instant pay-offs, you can save up, buy and then be happy with your purchases.
Short term financial goals are usually things that you really want, and could probably buy on credit if you were being impulsive. But hold off! Add a little patience to your life, create a savings goal and it will bring you added satisfaction for when it comes.
Medium-Term Financial Goals – Achievable in 3 to 5 years
The items designed for medium-term goals are usually worth a considerable amount more than those short term goals. You might need a new car in 5 years, or your kitchen and bathroom need updating.
By recognizing what you know you’re going to want in 3 to 5 years now, you can do yourself a favour and start saving early. Save a slice of your income every month into an account that’s not easily accessible to you. Having an effective financial strategy in place means you won’t have to inhibit your everyday expenses to save for this goal and you also won’t notice the income missing. If you need help setting medium term goals a good place to start is with an online financial advisor like the team at Master Your Money Now.
Long Term Financial Goals
Long term goals are generally financial goals that span for more than five years, these goals are often to save up for retirement, to be debt free or to be able to provide your children with quality education.
The ultimate long term financial goal for most people should be to retire from work with no personal or non-investment debt. Perhaps you’re planning on travelling the world in your retirement? Do you want to own multiple properties that will generate an income replacement in your later years.
Whatever it is that you desire, you need to imagine what you’ll want and what you’ll need, then plan how you’re going to achieve this. A strategic financial plan with outlined long term goals is best started earlier than later so that way you can achieve all that you would like to and be prepared for the unexpected.
Master Your Money Now
Master Your Money Now are a team of experienced financial advisers who can tailor a financial plan that will help you achieve your short-term, medium and long term goals. We are known for our online financial planning process, so we can help you anywhere in Australia. If you are looking to begin financial planning, book a strategy session with our team today.
If this is a topic that you would like to discuss in more detail, please go to www.MasterYourMoneyNow.com.au/getstarted to book in your complimentary 30-minute strategy session.
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Disclaimer: This information is general information only. You should consider the appropriateness of this information with regards to your objectives, financial situation and needs. Past performance does not guarantee future returns.
Chris Carlin is an Authorised Representative (No. 1235031 for financial services and No. 514748 for credit) and Master Your Money Now Pty Ltd ABN 65 627 229 681 is a Corporate Authorised Representative (No. 1265677 for financial services and No. 514747 for credit) of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523