The Importance of Setting Financial Goals

setting financial goals

No matter what stage of life you are at, goal setting is important to help keep your life on track. Some of your own goals will require assets for fulfilment, which in turn provide you with an idea of your financial goals and objectives.

It is easy to enjoy spending money as it is used as a luxury without foreseeing the future, thus exhibiting the importance of financial goals.

Define What You Want To Achieve 

Defining what you want to achieve is the first important step to create your financial goals. This can include anything from buying a car, saving for retirement, or simply saving for a rainy day. When defining your goals, make sure they’re SMART – Specific, Measurable, Achievable and Timely. It’s paramount to include your short-term and long-term goals. Don’t forget to revisit them occasionally to ensure they are still aligned with your current goals and objectives.

Set A Timeframe and Prioritise 

You need to prioritise your goals in the sequential order that you wish to achieve them, and then set realistic time frames for each. All your goals may not be possible to achieve right away, so prioritising is essential – for instance paying off a credit card will generally be a higher priority than saving for retirement. This step will provide you with a clear picture of what’s needed and help you stay on track to accomplish what you set out to achieve in an efficient manner.

Budget

Budgeting is an imperative step to determine your expenses and income, allowing you to understand the best way to distribute your income regularly. Elizabeth Warren’s 50/20/30 rule suggests finances are placed into the following 3 category split – no more than 50% should go to living essentials, no less than 20% should go to financial priorities and no more than 30% should go to personal spending. The financial planners at Financial Stability can assist you by creating a budget specific to your situation to help you take control of your finances.

Financial Planning Information

The information on this website is provided for general information only, it is not advice. It has been prepared without taking into account your particular financial needs, circumstances and objectives. You should consult your financial adviser before making any investment decisions.

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