financial charts showing in mobile for setting goals
Mobile phone showing financial chart, business reports

Steps

  • Make realistic goals
  • Rearrange goals based on your priority
  • Now plan a budget for a short term and long term
  • Make payments system which is automatic
  • Review every month/year once the progress of your goal

So, i given the short and sweet list of to do. If you thought to say “Come on man. i know it”. Fine. I understand. You know all of this but why you are not able to do it.

I know the reason behind this. Money saving is not only an art it is psychology. Great example is our Jio phone release in mar 2017 (may be before and got attraction from that month on wards)

Jio mobile phone in India
Jio welcome offer

Why people started to buy jio though they have existing mobile number?

Is it 4G? Is it free plan? Is it cheaper?

You will say lot of yes. Because you want to buy or already having it or interest to buy it. So it is your mind saying that you need that.

We need to feel that it is required from mind. Mind should feel that money should be saved.

Create a mindset that you need of more money for your future

1. Money goals

Why i am saying money goals to be defined. It is very simple. Take a pen and paper.

A story to tell you now. Dream a fine city/town/village. Now a baby is born. He is crying of food. Mother giving food. He is growing. His father taking out after wearing fine cloths. He goes to school/college. Like to start business. Father has no money. And so on…

Now what are the required things for him. Write any 5 things he is in need of.

For me,

  • Food
  • Dress
  • School fees
  • Money for business

This is a common cycle of life for which we need money. So what will happen if your father not having money to give you. May be at the time of your childhood, school time or college time, business / job searching time.

This should not be unplanned.

You have to plan your life cycle in terms of money. Otherwise you will not come to know who you are.

So write 5 short term (1-2 year) and 5 long term money goals ( More than 5 years)

Example

Short term:

  • Buying a bike
  • Buying a mobile
  • Lease rent for a house
  • Save for next year school/college fee
  • Save for next year medical expense
  • Maintenance charges for car
  • Insurance to be paid

Long term:

  • Buying a car next year
  • Buying a house on 2025
  • Marriage expenses on 25th birthday
  • Start own business after 5 year

2. Sort goals based on priorities

This is where financial planners required. Make yourself as a planner for the time being.

Put it like this.

Goal  Required from Year Frequency
Buying a bike 2019 One time only
Buying a mobile 2018 One time only
Lease rent for a house 2020 One time only
Save for next year school/college fee 2019 Yearly
Save for next year medical expense 2020 Yearly
Maintenance charges for car 2022 Yearly
Insurance to be paid 2011 Yearly
Buying a car next year 2018 One time only
Buying a house on 2025 2025 One time only
Marriage expenses on 25th birthday 2035 One time only
Start own business after 5 year 2032 One time only

Ok, now how to prioritse, just sort by required year.

Goal  Required from Year Frequency
Insurance to be paid 2011 Yearly
Buying a mobile 2018 One time only
Buying a car next year 2018 One time only
Buying a bike 2019 One time only
Save for next year school/college fee 2019 Yearly
Lease rent for a house 2020 One time only
Save for next year medical expense 2020 Yearly
Maintenance charges for car 2022 Yearly
Buying a house on 2025 2025 One time only
Start own business after 5 year 2032 One time only
Marriage expenses on 25th birthday 2035 One time only

Thats all.

Now give your feedback on this. i will inform how to create a budget.

3. Create budget

It is easy once you know how much you require. For each goal, amount to be filled up to find your budget.

 

Goal  Required from Year Frequency Budget in RS
Insurance to be paid 2011 Yearly                50,000
Buying a mobile 2018 One time only                50,000
Buying a car next year 2018 One time only              700,000
Buying a bike 2019 One time only              125,000
Save for next year school/college fee 2019 Yearly                75,000
Lease rent for a house 2020 One time only          1,200,000
Save for next year medical expense 2020 Yearly              100,000
Maintenance charges for car 2022 Yearly                25,000
Buying a house on 2025 2025 One time only          5,000,000
Start own business after 5 year 2032 One time only          5,000,000
Marriage expenses on 25th birthday 2035 One time only          3,000,000

4. Automate system

Here you will need good financial planner. You have know how to save money to reach your financial goals.

Invest in different financial savings scheme for each goal.

We will explain in detail.

Goal Required from Year Budget in RS Through
Insurance to be paid 2011                50,000 Recuring deposit
Buying a mobile 2018                50,000 Recuring deposit
Buying a car next year 2018              700,000 Equity Mutual fund
Buying a bike 2019              125,000 Share trading
Save for next year school/college fee 2019                75,000 Debt mutual fund
Lease rent for a house 2020          1,200,000 40% RD/40% Equity/20 % Cash
Save for next year medical expense 2020              100,000 Saving account
Maintenance charges for car 2022                25,000 Saving account
Buying a house on 2025 2025          5,000,000 Mutual fund SIP
Start own business after 5 year 2032          5,000,000 Mutual fund SIP
Marriage expenses on 25th birthday 2035          3,000,000 Mutual fund SIP

5. Review in frequency

This is final step in which you have to review and reorder your investments if required.

For that portfolio management is a good tool available in online. I will explain in detail in upcoming posts on the same.

Just read All about portfolio managment

Now it your time. Just ask what to like to do now.

Worksheet for you

You can download the excel sheet for your reference. You can use this to find your financial goals also. Give your feedback after using the excel sheet.

Download excel sheet- Financial goals

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