Why are Financial Goals Necessary?

  • 43
  • 0
/files/growth_money.jpg


Wealth creation has always enticed all, but is it easy? If you think that your future life is safe with your present savings, it is time to do a reality check. Are your savings enough for your future? Have you taken care of factors like inflation, interest rates, etc.? What if there is an untapped market that can make you abundant with little time and effort? The key to financial stability lies in the definition of your financial goals. Having a roadmap will help you plan better, strategize, cater to emergencies and amass heaps of wealth. Let us elaborate on why you need financial goals.

 

Reason 1: It helps you have focus 

What do you want to accomplish in the future, both professionally as well as personally? Categorize them into two separate groups. Develop a vision statement for each category. Then further divide them into objectives. It will give a clear action plan about where you are going. Let us see an illustration. Mr. A is an entrepreneur.

Professional Goals: To Build a successful business 

Personal Goals: To Build financial security for family 


To Build a successful business

  • Planning Organising funds for resources
  • Sales, Marketing and Promotions
  • Profit Management/Minimising Losses
  • Reinvestments
  • Other Investments
  • Dealing with insurance premiums, tax, loans, and other debts
  • Provision for contingency

It helps him stay focused in business in careful management of business finances.

To build financial security for family

  • Emergency
  • Childrens’ higher education and marriage
  • Homebuilding or renovation or both
  • Retirement
  • Tax planning and Insurance
  • Debt Repayment
  • Investments


Financial goals help him with adequate focus on family needs. And he will not end mixing up professional and personal goals landing the family in peril.

Reason 2: You can track where you are lagging

When you make a spreadsheet of your personal and professional finances, you can track your goals. It will help you stay in the game, and you can ensure that your personal goals do not get overlooked by your professional ones. Maybe you think it takes a lot of time. Well, is it better to have a dream life or a life with uncertainties? The ball is in your court. Tracking also helps you in reviewing your existing goals and re-shape them based on your financial needs. The customized approach has better odds of succeeding.

Reason 3: Opens new avenues of wealth, growth, and development

A good financial strategy can give you abundant wealth as you become proficient on new avenues to earn wealth, like passive sources of income other than your business. Once you are financially secure, you can focus on self and organizational growth and development. Better finance management is the key to success in life. This income could be dividends, capital appreciation from securities and land, rental income, etc.,

Reason 4: Makes you Stress-free and Relaxed

Who does not like having a stress-free and peaceful life? Most people worry about their finances a lot and, this could further take away sleep and cause other diseases. He can now easily plan holidays with families, stop thrashing money on parties and focus on family. Suppose your business is going through a bad phase; if you have other income-earning avenues, then you will be covered.

Reason 5: Diversification of funds reduces risk

We all know that India is going through a growth saga. If you are not making use of this opportunity, then you miss out on something important. Parking your surplus in a variety of options mitigates your risk to a certain extent. 

Conclusion

Maybe your financial goals are not picture-perfect. But the question is, are they going to help you in the future or not. For your goals to deliver, you need to have strict discipline. Never break the rules of your own game. Remember, consistency is the key here. However much you run short of money, never use the emergency fund for the family for your business, and this needs hard-core willpower. The beauty of your life lies in the strict adherence to your financial goals. If you want to see your family always smile, you will do it. How will you ensure that your financial goals succeed? We will come to that in the coming sections.

If you enjoyed reading this article and wish to support us by making a contribution or a small donation click on Razor Pay IIB Donation