Achieving long-term financial goals effectively is a necessary skill to get your finances healthy and, thanks to this, achieve financial success. First, all successful people are intensely goal-oriented toward achieving goals.
Those who succeed in this world set goals and work daily until they achieve them. Therefore, it is important to learn to set the correct goals and a very big risk not to do so.
What are personal financial goals?
Personal financial goals help you achieve your goals and guide you to make financial decisions according to your aspirations.
Having more money cannot be the main content of a financial goal. After all, money is just a means to get other more important things and resources… For example, it gives you more time, freedom, etc.
How to set financial goals?
Without a clear and concise plan, we are like a ship aimlessly. If we have a financial plan with its starting and ending point, it will be easier for us to achieve results. We will be shipwrecked month after month in a sea of financial problems.
Having objectives aligned with our values motivates us, inspires more confidence in ourselves, develops our skills, and makes us more positive. Setting and achieving financial goals is one more skill, and as such, it can be learned.
To improve your financial situation and its sustainability, you must follow the following steps to formulate them correctly.
The different types of objectives should be:
– Personal: It is up to you to reach them or not.
– Feasible: Whatever goals you set, achieving them in a limited period should be possible. For example: Lose 10 kilos in two years.
– Specific: You must establish exactly how much you want to earn and when you will get it. Will they be objectives in the short, medium, or long term?
– Measurable: Every objective must have a metric to measure the result… Have you achieved it all apart?
– Focused on results: Focus on the results; if your actions do not allow you to achieve your goal, do it another way, and change your strategy.
– Limited in time: With a deadline. What day, month, or year do you want to achieve the result? Are they for the short, long, or medium term?
Now, we will learn how you can achieve long-term financial goals.
1. Control your budget:
It will be easier to achieve other financial goals if you know how you spend your income. You have to have a strategy that allows you to keep track of your income and expenses. Pay all your loans or bills on time.
2. Pay all your loans and bills on time:
Bring your payments up to date; that way, you will avoid paying late fees and interest.
3. Start saving as much of your income as possible:
Without savings, there is no investment; without investment, there is no profitability, and without profitability, there is no financial freedom. Saving should be one of the pillars of your financial plan or strategy. Things happen in life; you can have a car accident, lose your job, etc.
If you do not have an emergency fund, you can destroy your monthly budget and burst your economy because you will have to ask for a personal loan or, worse, use a credit card to get out of trouble.
4. Increase your income:
If you increase your income, you can save and invest more… This way, you can achieve your financial goals in a shorter period. A quick way to earn more money is to ask for a raise… If they don’t give it to you, look for another job. You can also do overtime or start a business in your spare time.
5. Start investing:
The sooner, the better – The best time to start investing was yesterday, and the second best time is today. Make your money work for you day and night, squeeze all the profit you can and take advantage of the effect of compound interest.
6. Learn about financial management:
If you don’t control your money, it will always control you. You must learn to manage your family budget and household finances to achieve economic freedom. What percentage of your income will you allocate to pay for food, leisure, rent or mortgage, other bills…
How many bank accounts will you need? How many savings and investment accounts? What will you do to pay fewer commissions and have better service in your main bank account? If you cannot manage well when the amounts are modest, what makes you think you will do better when you have to manage millions of euros in different accounts?
7. Plan retirement:
The years go by quickly, and we all get older without realising it. Don’t think that you are still young to worry about how you will live when you can no longer work. Saving for retirement is one of your most important long-term financial goals. To get the profitability you need from your savings, which allows you to live a comfortable old age, there are different financial products.
In short, knowing how to set financial goals or goals of any kind is one of the most important skills you must develop because it hides the seed of your future financial success.
This article shows the basic concepts and examples of short, medium, and long-term financial goals. You have also discovered the method of setting financial goals that I use myself. Now you know the route and the next steps you have to take, get down to work and create your action plan. It is the best investment you can make; it is worth the effort.
Remember, to achieve your financial goals, the first step is establishing them.