Goals and Priorities

In your daily life, things that are important and require immediate attention take precedence over everything else. Likewise, your financial goals  need to be prioritized. A financial goal can be classified as short, medium, or long term depending on the timeframe in which you need to achieve it. The goals you want to achieve within a year are short-term, those  you want to achieve within five years can be said to be medium or medium-term, and those you want to achieveThis is because you would need this data to calculate the  estimated cost of the goal in the future. Before you begin, make sure the goals are realistic and achievable, otherwise the whole exercise could be pointless and frustrating. For example, a Rolls Royce worth several crore  rupees may be your object of desire, but at a salary of 6 lakh a year this may not be a viable idea. 

PRIORITIZE GOALS 

After you've written down your goals, you need to prioritize them.By nature, we all  have an endless wish list. However, given our limited resources, it is difficult to achieve all of our financial goals equally. Prioritization helps you allocate existing resources and direct future investments toward a more important goal. While good planning can achieve all of your financial goals, prioritization helps you focus on the  financial goals  that matter most. For example, save forRetirement is definitely more important than buying a luxury car or vacationing abroad. Or you would like to buy a house in the next three years, for example. This could mean spending around 10 lakh as  a deposit. Because it's a high-priority goal that's also close by, your investments should ideally be  more geared towards it than, say, retirement. 

THE BASIS OF PRIORITY

But how do you prioritize the goals?This is because your desires collide with your needs at various stages of planning. In situations where your surplus isn't enough, you need to trim discretionary spending — spending that  you can defer, reduce, or eliminate.Therefore, the basis for prioritization mainly depends on the criticality of the target objective and also the proximity of this event. So, for someone with young children, the needs of the children and retirement can be equally important. In such a case, both objectives must be given due consideration. However, for someone with teenage children, parenting or marriage are more important than, say, retirement. In addition, the needs of children of normal age are  largely satisfied andThings like going on holiday abroad or buying a second home could be postponed to a later date. 

CHECK YOUR PROGRESS AND RESET YOUR GOALS 

Goal setting is not a one-time exercise. Your financial realities change over time. For example, you should set your goals again after your marriage, the birth of a child, the marriage of a child or after events such as increased income due to a job change.Therefore, it is important to review your financial goals regularly, preferably annually. The review process  also helps you monitor your progress toward your financial goals. If you find that progress is insufficient, you can change the various elements of your financial plan accordingly. , like your savings, your investments, or your tax expenses. Setting financial goals and working to achieve them are clearly not the theoretical exercises that might seem at first glance.They are based on the reality of your financial income and expenses. Only by tracking your progress at each milestone can you  track the effectiveness of your financial planning process. 

BACKGROUND INFORMATION 

A financial goal can be classified as short, medium or long term. depending on the amount of time  you need to achieve it. Prioritization helps you allocate existing resources and direct future investments toward a more important goal.Understanding the difference between your “needs” and “wants” is crucial to determining which goals are important and which  can wait. The basis for prioritization depends primarily on the criticality of the intended goal and also on the proximity of this event. Review your financial goals regularly, preferably every year or two.