How Should You Plan For Your Financial Goals?

Breaking down long-term objectives into small-term goals prevents from getting overwhelmed by the numbers and makes the long-term goals achievable.

“People with financial plans are much more likely to feel prepared, even in tumultuous times. They’re more likely to feel that their dreams and goals are secure. And, oh yes, they do actually save significantly more.“ Jean Chatzky

So how should you plan for your financial goals? I love lists. If things in the office started going every which way, a list put me back on track. While shopping, a list stopped me from impulse buying. Now when it comes to planning my finances too, I find a list most useful in letting me set my goals and more importantly, achieving them.

My secret to successful financial planning is making a list of my money goals. Breaking down my long-term objectives into small-term goals prevents me from getting overwhelmed by the numbers and makes the long-term goals achievable.

What is financial goal-setting?

This is nothing more than a list of things you want in life, with a bit more direction. So get that note-pad and eraser-tipped pencil (goals will keep changing) and start making your list. Include everything you dream of – big and small.

  • house
  • car
  • foreign vacation
  • paying off any loans
  • retirement fund
  • emergency fund
  • sending your parents on a holiday
  • school fees in an international school/ college for your kids
  • going for higher education/ skill enhancement to a foreign university
  • taking a year off to backpack across the world

Prune it

The next step is to sort through the list. Your list needs a bit more work to become your financial goal. A financial goal essentially needs three elements – a thing or service that you are investing for, the cost of the said thing and the time frame in which you would want to reach or acquire that goal.

Sort the rest according to a time frame into long-term and short-term goals. For example, a car might be a short-term goal while your retirement fund is a long-term goal. It is important to have small, easily achievable goals in your list as there is immense psychological satisfaction in ticking things off a list; along with the long-term goals to keep you focused.

Now do the math

Sit with a calculator and figure out how much money will make your dreams come true. Remember, the numbers may daunt you, but as you keep getting closer to your goal, it will make it all worthwhile. And because the numbers are only going to get higher the longer you wait – factoring in inflation – the sooner you start the better.

Find the right investment tools

With a real-time financial goal in sight, it becomes easier to find the right investment tools to achieve it. Let’s assume you want to take a trip in September 2026 which would cost you ₹3L in today’s value. If I consider inflation of 10 PER CENT (yes, that is how expensive travel gets) the same goal will cost me ₹ 4.8L in January 2026 and I need to plan for that amount. When I break it down, wanting to save in a combination of safe mutual funds, I need to start a SIP of ₹ 12,000 every month to get to that amount.



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