If you want to visualize your personal financial life, try to think of it as a journey. A journey with several stops in the middle.
And these stops are your… Personal Financial Goals.
Identifying financial goals is necessary when you are investing according to a goal-based investment plan. You need to know what you are aiming for to prepare well for it. Right?
But I have seen it happen many times that people find it difficult to identify and finalize their real-life goals.
Infact, one of my clients had this problem too.
When I sent him the data collection questionnaire (as part of the planning process) that had a section about financial goals, he told me that he wasn’t sure what his goals were! He just wanted to invest! 🙂
Now every person is different and naturally they are going to have different financial goals.
But at times it can be helpful to see suggestions to build up your own thoughts. So this post is about those suggestions – a list of examples of personal financial goals.
Remember, these are just suggestions and hence, all of them may not be applicable to everyone. But nevertheless, the idea is to set you thinking about your financial goals if you still haven’t thought about them.
Examples of Personal Financial Goals
The easiest way to think of your goals is by classifying them into short-term, medium-term and long-term goals.
The definitions can vary but in general:
- Short term financial goals are ones to be achieved in up to 3 years
- Medium term financial goals are one to be achieved in 3-7 years
- Long term financial goals are to be achieved in 7 to 10+ years
Now for some goal examples:
- Children’s Graduation
- Children’s Post-Graduation
- Children’s Marriage
- Building Retirement Corpus (or aiming for Early Retirement)
- Saving for Downpayment – to buy a house on home loan
- Setting up an emergency fund
- Clearing the home loan as soon as possible
- Clearing other loans
- Foreign Trip (one time or every few years)
- Saving to start a family in few years
- Contributing in sister/brother’s marriage
- Car purchase
- Financially fortifying before quitting job to become an entrepreneur
- Becoming financially free (this means different things to different people)
This list is ofcourse not exhaustive.So now if someone was to ask you about what your short term and long term financial goals are,
At times, people can have very weird goals as well. 🙂
But if someone was to ask you now about what your short term and long term financial goals are, atleast you will know what are the possible common ones. 😉
GRID These Financial Goals
By grid(ing), I mean put them in a matrix so that you can prioritize them.
This can be done easily using this Financial Goal Planning Excel Sheet that I have created for setting financial goals worksheet. It is FREE and you can use it to brainstorm and finalize your goals.
Before you use this sheet, I strongly suggest you read How to Set + Not Mess your Financial Goals to know how best to use this excel goal sheet.
They say that writing down your goals increases the chance of achieving them by 24%. So there is no denying that it is important.
Now….I made up that percentage. 😉
But nevertheless, unless you know what you are aiming for, you will not know how to achieve it. So goal-setting exercise does help…really!
Knowing the time frames helps in matching goals with the ideal investment options. And prioritization of these financial goals gives you a very clear idea about what is important and holds higher preference over other goals in various time frames.
Here is the link again if you missed it earlier. I promise you it’s useful. Do give it a try this weekend:
Download Financial Goal Setting Excel
You will find several short term financial goals examples, mid- and intermediate term goal examples and long term financial goal examples in this excel.
Knowing and setting your goals is the first step towards reaching them. Once that is done, it’s best to take the goal based investing route to invest for these goals strategically.
Having financial goals is fine….infact it’s natural to have one.
But you might feel that why is it important to have a personal financial plan? After all, you can simply save money as you have been doing it all these years. But believe me… Goal based Financial Planning can be a gamechanger in most people’s lives. And it is a very intuitive and a powerful concept.
Once you understand it, it is highly likely that you will adopt it quickly because of its practical utility and because it does something very important – allows you to invest for each of your financial goals smartly.
Here is a Detailed Guide on Goal Based Investing that I created some time ago. It will answer most questions that you have and also those that you don’t have. 🙂
The main goal of personal financial planning is to ensure that you achieve your real life goals that require money. A well thought out and detailed financial plan can lay a solid foundation for a stress-free financial future.
If you are a do-it-yourself investor and know how to make a financial plan, you can do this on your own. But if you are not conversant with how financial planning calculations work and how various pieces fit into the personal financial jigsaw puzzle, it’s best to take help of a competent and trustworthy investment advisor.
You need external help more so if you have no shortage of financial goals but somehow, are unable to save properly for all of them.
The advisor can help you rationalize your goals, assess your actual (and not theoretical) risk appetite, chalk out a solid asset allocation for the goals, suggest suitable investment avenues and more importantly… push you to do what needs to be done.
And if you think the fees you need to pay to the advisor is unnecessary, then remember two things:
- Few good pieces of financial advice can offset many years of fee charged by advisors
- Good financial advisor can be the difference between meeting or missing your financial goals
There is a reason why many people avail services of investment advisors. 🙂
And please don’t be under the impression that if you get hold of somebody else’s financial plan, it will work for you too.
Every person’s financial profile and situation is different. And so are their financial goals and their abilities to invest or them.
Copy-pasting somebody else’s financial plan in your life can be disastrous.
You might save a few thousand on fees, but can lose several lacs due to wrong investment selection. In goal-based financial planning, there is no one-size-fits-all approach.
So that’s it.
Planning for financial goals shows you the right direction and enables you to invest properly for the goals. But for that to happen, you first need to know your goals. I hope that if you were looking for a list of personal financial goals for reference, then this article helped you.
In case you have more queries or need professional financial planning services, you can contact me using this form or by dropping me a mail. I am a professional Investment Advisor and can help you with your personal financial planning and financial goals.
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Amazing tips ! I really like it. Keep up the great work. Thanks for sharing this post with us.