Understand Financial Goals Before You Regret | Financial Goals

Meke Financial Goals

Understanding Financial Goals is very relevant topic to understand the personal finance in everyone’s life, because everyone faces financial constraints. As you know the resources are limited and wants are unlimited, this is very simple basics of Economics. To fulfill the unlimited wants with limited resources, proper financial planning is required. Keeping this in your mind you may have some financial goals for you, your kid’s education or may have some other goals like for the Son/Daughter’s marriage, building house, settling abroad or setting-up a business. So we can see that everyone has some definite financial goal which is is very important.

Setting up the Financial Goals the following points to be taken care of

  • Objectives to make the the financial goal must be clear while setting the goals
  • While making the financial goals this should be very much clear. Which type of goal you are going to make? Work on that. Because if there is any confusion, then it’s possible that you can distract from your goal.
  • Goals must be realistic
  • Goals must be realistic and Not beyond the reach of your income this should be near to your earnings.
  • Inflation must be taken into account
  • While making Future Plans or goals, inflation should be taken into account. If you decide to build some particular amount to be spent in future, give the weightage to rate of inflation. 
  • Short Term and Long Term Goals
  • Goal must be divided into short run as well as in long run. In short run you may need some small savings to fulfill the normal requirement. But in the long run you may need some huge amount.

Some Common Goals to Understand Financial Goals in better way

1.Higher Education

All parents dream that their children should get proper education in the best educational institutions. But managing the educational expenses is not that easy. For this proper financial planning is required when you are in your early age. There are a number of family social as well as personal requirements to be fulfilled. As the financial sources are limited so for make balance in present as well as the future life proper financial planning is required.

2. Marriage

Marriage and various socio-cultural activities have become very costly to manage today. Particularly when everyone believes in show off culture, these have become even more expensive events in every family. So to fulfill this need you should always save a good amount of money for this purpose. And financial panning very important for this.

3. House Building

Building a house is one of the basic requirements and dreams of every individual. In this time when inflation is increasing with high rate, Fulfilling the other basic needs has become very tough. And building a house has become very expensive. If you are going to build a house by availing house loan from the banking institutions or any other financial institution. Now you will be paying high interest and basic EMI. So planning for this also required.

4. Foreign Tour

If you have a dream to visit different recreational sites in your country or abroad, you will have to maintain your bank account smartly and we’ll have to save a sufficient amount to live your day to day life and maintain sufficient balance to be spent on the trip. Making a tour is not that much easy without proper financial planning. Everyone dreams to make the world trip but lack of money it becomes difficult to fulfill this dream.

5. Manage Health

We all know that “health is wealth” and maintaining health is one of the most critical problems in every individual’s life. So it becomes very difficult to maintain healthy life whenever we fell ill without proper financial planning. So to deal with health issues financial planning is required for managing health and meet the medical requirements.

6. Building Property

You may have dreams to build a property like having luxurious Apartments, Villas, luxurious cars and any other movable or immovable assets. But building property needs proper planning. For this you will have to start early and start saving and investing so that you can do this in well organized manner.

7. Wealth Creation

If you have a Goal to grow rich and need a lot of wealth, bank balance or any other form of wealth. For this you should make a goal and pursue it with proper planning with saving, investing and creating wealth from multiple sources. So that you can grow rich with a good amount of wealth.

8. Creating Capital to Start up a Business

If you are willing to start up your own business then the basic capital is the first requirement for this. Secondly to purchase the raw materials machines other fixed assets and working capital the funds are very much important. For his you can start with little saving and rest can be borrowed from the Financial Institutions. Because relying only on borrowing is not good idea.

9. Retirement Financial Planning

Till the time you are working you may not face any financial problem. But after retirement the responsibilities and expenses on health and family increases or remain constant and sources of income decrease. So with this opposite relation between income and expenditure, creates a huge problem before a retired person. Now you wants to move smoothly even after retirement then you must have to make proper financial Goal and proper planning for this. So that you may not face any difficult situation even after the retirement. 

10. Leaving Property for Descendants

In some societies this is common habit of people to save some amount from their income for descendants. This may led them to comfortable and leave the joyful life after the death of him. So this may be one of the goals.

11. Any Other Goals

Apart from the above mentioned goals there may be a number of financial goals in any individual’s life but the matter is not having the goal alone but having the proper approach and planning to manage the finance and reach and Understand Financial the Goals.

Now we have the issue of how to manage our Income to reach these goals with limited sources of Income while fulfilling the unlimited wants as every individual is ruled by the same principle of economics which is applied to the economy for a country

How to Beat Inflation and Reach / Manage Financial Goals

First of all there must be a proper goal which is to be fulfilled in future, this should be very much clear, now to reach that goal proper financial planning is required. Managing finance is very much important how to manage income and how to save a little amount from the limited income. When we analyze then it can be found that we have so many requirements in our day to day life but we have very limited sources of income. In this situation rather than making saving habits we spend all our income on routine requirements and left empty handed prior to salary day.

Financial Planning 

Only to Understand Financial Goals is not enough but planning is also required. First of all this is very much necessary to build a habit of forced saving. We know that we have a number of financial requirements in our day to day life. So we should save our income forcefully not letting the worst situation come. When we have to take money from our friend or borrow from the Financial Institutions or any unorganized sector. This can drag you in the debt trap. So this is very much necessary to save forcefully.

For forced saving, SIP ( systematic investment plan) may be started in mutual funds. SIP With small amounts which can generate handsome income with good rate of return. Recurring deposits also can be started for a fixed rate of return or you can just make a fixed deposit of some amount form your income and then spend the remaining money with you.

Start Investing a Little Amount in Some Financial Instruments

Invest in some instruments which can provide good return in future. like you can invest your savings in diversified manner e.g. you can invest the amounts in fixed deposits or any other financial instruments. These can give you some fixed amount of income in the future. For more variable income investment can be made in other assets. These may be more risk weighted but keep in mind this should be in proper ratio to the amount saved under secured assets. And this should be under less or with no risk factor involved. You can also learn investing in mutual funds for this purpose here.

Investing in Some High Profitable Financial Instruments

Purchase some good stocks and hold for the longer duration of time. You can also invest in other inflation weighted instruments like mutual funds, Govt. Bonds etc.

Investing in Real Estate

Investing in real estate can be a wise decision because investments in property can beat inflation easily. And this also provides very good return in the long run if everything goes fine in the economy. But the one thing which should be kept in the mind while going to invest in property i.e. genuineness and its location. If the location of a property is not suitable for this in backward areas and does not come under any development project, the rates can not increase as good as it is expected. Similarly if a property is purchased which is already disputed, the invested money may be converted into non-performing asset.

Conclusion

So with above discussion we can see that understanding financial requirements it is necessary to understand the financial Goals. But above all if you really want to be financially sound first of all start saving something. Learn to save here.

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