Financial goals are important for financial success. Setting these goals allows us to understand where we are currently in comparison to where we would like to be. It is important to recognise that the type of goal you have impacts the strategy you must take to achieve it. Financial goals can be long term or short term and once you know which category your goals falls into, you can take the first steps working towards them.
Long term financial goals
Planning your finances for years in advance can be difficult, especially if you have many responsibilities to meet, such as a mortgage, savings for retirement or achieving financial security. The solution is to prepare yourself in advance, and one of the most important ways to do so is to keep your finances on track and take control of your money. Long-term financial goals are typically associated with major life events that take five years or more to complete. You can schedule them whenever you want, but the sooner you plan, the better prepared you will be.
Short term financial goals
Completing your short-term financial goals often lays the foundation for long term success. These are often things you want to accomplish within a few months and up to a year, such as paying off debt, saving for a holiday or tracking your monthly expenses. A worthy financial objective in and of itself is developing and adhering to a reasonable budget. Without a budget, your efforts to accomplish your goals will fail. A short-term benefit of improving your finances is that it can have a positive impact on your credit rating.
Steps to achieve your financial goals
Firstly, it is important to write down your goals as you’re more likely to achieve them that way. Your goals must be specific, measurable and time sensitive, therefore you must set a deadline that is achievable for you. It is also important to ensure your goals are in line with what you personally want and not what you believe you should achieve.
