If you have tried setting financial goals but did not know where to start or how to go about the whole process, you are not alone. A lot of people, even new investors, initially struggle with setting financial targets. And this is normal; when it comes to finances, people are either unable to save enough or invest properly such that their future is secure and they can fulfil all their financial responsibilities. As a result of this, some goals will always be left out.

Some people, however, start with purchasing a life insurance plan as that is the easiest way to start planning your financial goals – by securing your family’s future. And while life insurance is surely one of the apt ways to start setting your goals, here are some other ways that may help you.

4 Ways to Set Your Financial Goals

We often feel that planning our financial goals may be too much to deal with. At such times, it is alright to approach a good financial advisor. You can also take simple steps to start planning your future by analyzing different policies and choosing one that is apt for your needs. After that, you can start focusing on investments and long-term savings in different avenues apart from life insurance. Check out how you can go about setting your financial goals as given below:

• Segregate your Goals
  
  Life is not a race, and while time is of the essence when it comes to having your finances sorted, attempt to break down all your financial responsibilities into smaller goals. Be it your child’s education, creating an emergency fund, starting a new investment, buying a savings plan, or setting aside money for monthly utility bills, etc., separate your long-term and short-term goals.
  
  
• Start a Monthly Budget
  
  Many of us attempt to save a lot of money in one go and that can lead to some rash decisions or compromises. But the trick is to save small amounts of money regularly. By creating a monthly budget, you will know how much you can save or invest once you sort out how much your bills, household expenses, other essential needs and some luxury needs such as entertainment will cost.
  
  
• Build an Emergency Fund
  
  You never know what may happen in the future and what type of situation may lead to a dearth of financial resources. It is for this reason that you should start creating an emergency fund that will support you and your family in case of an illness, accident, or the loss of income. Ensure that this fund is adequate enough to last for about 6 months to 1 year for the whole family.
  
  
• Pick Suitable Investments
  
  Before you invest, know your risk profile and how much you can commit to investing each month. Learn about various investment options, determine your long-term and short-term goals, and see where your risk profile fits. Repeat this exercise every time you need to start a new investment so that you only invest where you can expect good returns on your investment.
  
  

Dealing with Roadblocks in Setting Your Goals

Before you start setting your goals, there are a number of questions and doubts that will cross your mind and make you feel that maybe financial planning is not your cup of tea. However, this is far from the truth – everyone needs to plan their finances. It is perfectly acceptable if you simply want to start by putting your money in small savings or simply by buying a life insurance plan of your choice.

One of the main reasons people are not sure about setting long-term financial goals is because they are uncertain about continuing such savings or investments. But the good news is that there are plenty of investment and savings options in the market and you need not necessarily commit to a single investment for the next 10-15 years.

People also cite reasons such as the shortage of financial resources for being unable to set financial goals. And this can be true as a number of financial emergencies early in your life can drain your little savings and become an issue when making further financial plans. But think about future emergencies and how you can better deal with them with additional financial support. It is possible to start an investment with a small amount of money. Be it mutual fund SIPs or life insurance premiums, you can always choose an affordable investment amount to continue growing your wealth or protecting your family.

Therefore, if you feel that there are too many obstacles in your way that are hindering your process of creating a financial plan, this would be the right time to start with it so that your future can be secure and you may not have to worry about taking extra loans to deal with these situations.

Conclusion

One of the best ways to set your financial goals would be to start keeping track of your expenses. For many people, irrespective of age, a small diary where they note every little expense is a must-have. You can maintain such a diary on your smartphone as well. It doesn’t matter how much or how less you earn – a financial plan always ensures that your money is not spent mindlessly.

L&C/Advt/2022/Nov/2942