How to Set Financial Goals: 6 Simple Steps

Whether you are a salaried professional or a businessman we all think of saving money irrespective of how much we earn. They always say that the money saved is money earned. Many of us try to use a lot of strategies and ways to save money or get additional jobs to add funds to our savings. This pandemic has taught us to save each penny as many of us lost our jobs in this phase. Hence it has become important to plan the finances well in advance and be ready to handle any kind of financial crunches that can appear in the future.

There could be many financial goals that you can set for yourself. Financial goals are categorized into three types such as short term, mid-term and long term. Short-term goals focus on the goals that can be achieved within a period of 1 to 3 years. Mid-term goals are generally planned for the duration of 3 to 10 years while the long-term ones can take up to 20 years and more to achieve. Few of you might be saving to clear off your debt while few of you might be saving to build your emergency fund for the bad times. One of the most common financial goals that people set is to save for retirement. Most financial consultants such as https://www.finnacle.com.au/ advise planning multiple financial goals. Here are few ways to start your financial plan to save your money and build your saving corpus gradually.

Create your financial goal

The first step that involves setting up your financial goal is to create the one. Take a notebook and pen. Decide for which things you wish to save the money and write it down on paper. Since it is not possible to achieve all of your goals at one time, try to choose a couple of goals at a time. As mentioned above you can choose one short-term, one mid-term, and one long-term goal depending upon your wishes. Write down these goals on a paper or sticky note and put them on the desk or a place from where you can see them every day to motivate yourself.

Understand your Income

So you have set a couple of goals for yourself now it is time to execute it. How will you do that? Here is the plan. First, understand your income. You are going to fund for multiple goals and hence first calculate how much you are going to fund for each goal every month and write it down. Now check your income and see if it is sufficient to cover your expenses along with your goal funds. If not then try to look for any side job or a gig that can pay you extra to support your financial goals.

Make a list of your expenses

Now you have decided to take up extra work or a side job to fulfill your financial goals. But you would need to save some for your other expenses as well. Hence it is important to create a budget. Make a list of your monthly expenses and check how much you are left with money after spending money on it. This will help you to take full control of the finances and you will have accountability for the same.

Prioritize your expenses

There is no harm in saving extra bucks, right? If this thing comes into your mind, then make sure to prioritize your expenses. Try to check if you can reduce the spending on any specific things such as subscriptions or memberships which you hardly utilize. These things might look small but can save a huge amount of money in the long run.

Look for more ways to save money

How about the shop a bit extra while there is a sale at your nearest supermarket? Or how about cooking food at home to save the extra money on takeaways and cafes? Try to look for more ways to save each penny. You might find it harder initially but gradually you will enjoy the process once the money getting accumulated in your goal funds.

Stick to your savings routine

After a setting couple of goals, you started saving for it for few months but quit after some time thinking that you would continue after few days since you have got some financial emergency. Remember that no matter how much money you earn you will always have some of the other financial issues every month. Hence keep your mind prepared for it and stick to your plan of saving.