Bringing your future to life.
Personal finance goals drive us from one stage of life to the next. You might be a student trying to pay off debt or looking for a new home to start a family. Inevitably, the life goals that we have are heavily influenced by the personal finance that we can access. So, if you want to move smoothly from one phase of life to the next, learning how to plan for – and meet – personal finance goals is a key skill.
Why set personal finance goals?
For most of us, successful money management is all about planning. Unless you’re born into very wealthy circumstances it takes effort and focus to get to the stage of owning your own home or having a sizeable pension. There are many reasons why we all need to consider setting personal finance goals, including:
- To ensure that you have enough income for your retirement
- To provide for a family
- To enable you to achieve career goals, such as setting up a business or retiring early
- To give you the freedom to enjoy your life as you want to, such as travelling the world or buying clothes or art without having to borrow money on secured loans or credit cards.
Planning your personal goals
Personal finance goals require regular review, as life is constantly changing – the planning is an ongoing process. Every time you revisit your financial goal planning there are three key stages to consider: short-term financial goals, mid-term financial goals and long-term financial goals.
Short-term financial goals – think about what you’d like to achieve in the near future, for example in the next month or couple of months. This could be something as simple as making repayments on time on your bad credit loans, or you could set a savings target.
Mid-term financial goals – looking ahead at the year in front of you, what would you like to have achieved when it comes to an end? You can take mid-term financial planning as far ahead as three to five years, depending on your age and circumstances.
Long-term financial goals – these are your life goals that you’re hoping to achieve over a longer period of time, say five – 10 years. This could be anything from moving abroad to paying off your mortgage in time for retirement.
How to meet your personal finance goals
- Set realistic goals – if your goals aren’t realistically achievable then it’s easy to become demotivated and give up
- Break goals down into small stages – give yourself a simple route map to the financial objectives you want to achieve
- Regularly review your progress and adjust your goals accordingly
- If you’re in a relationship then share and coordinate your planning so that you and your partner are working together
- Celebrate the successes – marking achievements is an important part of going on to reach all your goals
- Make sacrifices – achieving personal financial goals requires a combination of maximising earnings and cutting back
- Don’t give up – any realistic financial goal is possible if you don’t give up on it.