If you don’t know where you are going, you’ll never arrive. Financial goals help you:
– keep focused on what you consciously determined as importan
– develop the most appropriate saving and investing plan
– unveil the career opportunities
– encourage saving
– get a sense of achievement
– make an unbiased appraisal of personal finance.
Develop an individual plan for each goal
Each financial goal requires an individual approach. It’s a good idea to distinguish between short-term and long-term goals, set the priorities, and determine the acceptable drift in the set numerical targets. For example, saving for a pension is important, but having a small emergency savings fund that can cover 3-12 months of your regular expenses is a higher priority.
The scope of planning and the desired size of the savings fund will help you through decision-making. Our earnings change over the years, and it’s essential to have a good plan that will help you allocate the money wisely.
Set the appraisal standards
A savings plan is a good means to alleviate the stress related to the appraisal of your finances. We often get emotional when it comes to money. Savings is a good indicator of whether we managed to exit the vicious circle of racing to match the income and expenses.
The basic idea is that you’re doing quite well if you manage to put aside some of your income. Setting more precise appraisal standards in advance will push the idea further and will alleviate stress even better.
The key is to set the appraisal standards. Saving ‘as much as possible is not a good standard. You’ll never be pleased with the result. ‘Putting aside 10% of my earnings every month’ is a better plan that gives you some tools to measure performance. If you can’t match the goal, you will at least be able to see how many months went well and how far from 10% you’ve been during the saving period. This will give you the opportunity to reconsider the plan, adjust expenses or earnings to match it, and finally hit the target.
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