How to Set and Achieve Financial Goals
Saving money for the purchase is a tale as old as time. Whether you’re a nine-year-old wanting a new bicycle or an adult trying to buy your first house, we all have experience trying to save up for something that right now is financially out of reach.
First, you need to set a definite financial goal. What are you want to achieve? How long will it take? What are the steps to achieving it?
Once you’ve highlighted what’s important to you, you need to figure out what goal is achievable in the short, mid-range, and long term; develop a Specific, Measurable, Achievable, Relevant, and Timely( SMART) strategy and a tight budget to achieve it; start saving and constantly monitor your success.
That’s a lot, but it’s also achievable. Here’s how.
What Are such Goals?
Financial goals are an investment, savings, investment, or spending targets you hope to accomplish over a set period. The degree of life you’re in usually decides what type of goals you wish to achieve.
For example, it may be an easy short-term goal if you’re in high schools, like saving for a new computer or something more challenging, like saving for a house or startup business.
On the other hand, a growing small-sized business will have a long-term goal of achieving specific sales. Expansion of offices and management cashflows are other popular financial goals.
Why You Should Set Financial Goals
A well-known financial planner offers a variety of services to his clients. As some need help in financial modeling, others want assistance with Financial plans, and many also need to sort out their overall financial picture.
There’s a common question– what is your financial goal?
“For any startup business owner or an individual who is new, if they lack financial goals, if people have failed to plan, it’s similar to saying, they are probably planning to fail.’’
Accordingly, there are several golden rules. The rules aren’t secure, though. One of our Expert Financial Planner Fahad Sarwar a certified financial planner based in Karachi calls them “guesses.’’ Who knows what’s ahead in 10 years? For that matter, who knows what’s ahead next month? So, the best-prepared people, the smartest, make the best guesses possible.
“When I was studying to become an ACCA, the so-called money ‘number’ was very important,’’ my mentor said. “That was the amount we’ve got to get to when we’re 60 to provide us with the desired lifestyle we want for the rest of our lives. That was a long time ago.
“But how about if there’s a financial or economic downturn? What if circumstances change? It is also not always the number that matters in Financial goals. It’s the process itself. It’s establishing principles. If you adhere to the principles you have set, you’ve set yourself up for success.’’
How to Set Financial Goals for Individuals and Companies
Here are 6 steps to setting great financial goals.
- Figure out what matters to you. From the practical and pressing to the inconsistent and distant, put everything on the table for inspection and measuring.
- Prepare a Financial Model for at least 3 years of forecasting. For example, if you have an event management company, then prepare an Event Management Financial Model.
- Apply a SMART- goal strategy. That is, make positive your ambitions are Specific, Measurable, Achievable, Relevant, and Timely. SMART.
- Create a realistic Financial Plan. Prepare a detailed financial plan on what you will do in the next 5 years and how you will utilize your funds and generate money.
- Make a separate accounting for saving and investment.
- Monitor and measure your progress. You have to make sure that you are achieving specific benchmarks. If you are unable to achieve it, then take some time to re-evaluate what went wrong.
How to Achieve Your Financial Goals
The best way to attain your financial goals is by creating a Financial Plan that prioritizes your goals.
When you examine your own goals, you’ll discover that some are far-reaching and broad, while others are restricted in scope. Your goals can be divided into three categories of time:
- Short-term financial goals take under one and a half years to achieve.
- Mid-term financial goals can’t be achieved immediately but shouldn’t take too many years to achieve.
- Long-term financial goals (over six years) may take several years to achieve and, as a result, require longer engagements and often extra money.
The goal-setting rule includes estimating the amount of money required, determining what goals you plan to reach and other resources required, and planning how long you expect to take to reach each of your goals.
To learn more about financial goals practically. We can check out our restaurant case study.
Develop A Goal Chart
Developing a financial goals chart is a great way to start this process. Here are the five steps you should also develop to set up your goal chart:
- Write down one personal financial goal. It should contain numbers that are achievable and measurable.
- Decide if your goal is Long-term, mid-term, or Short-term, and
- Determine how much money you need to invest to reach your goal and save or arrange the amount.
- In the case of a Business, prepares a marketing plan or a dashboard. How you will market yourself is also essential to work on your communications as an individual n to start communicating with your friends, colleagues, and people you like.
- Constant follow-up and measure your mistakes and try to overcome them.
All of that might seem daunting, but it’s best to establish incremental goals. Prioritize, then achieve. Hence after accomplishing some of the manageable goals, you gain confidence in your decision-making to achieve the more difficult targets that require more time and discipline.