Setting up financial goals is an integral part of our financial planning process. But merely identifying and setting goals is not enough. You need to plan well to achieve these goals and fulfill your aspirations for yourself and your family.
Long-term goals like planning for retirement, buying a home, or saving for your child’s higher education or marriage require a good amount of research and planning for their timely achievement. The process involves saving and investing in instruments like bank fixed deposits or other investment options in such a manner that you can build up a kitty to meet these goals. Let us find out more about how to plan for your long-term financial goals.
Identifying and Establishing Goals
The first step is to identify the goals that you wish to achieve. They could be related to buying a house or saving for your retirement or your child’s marriage or higher education.
Quantifying Your Goals
Once you have identified your goals, you need to quantify them keeping in mind the inflation and other factors that may impact them. Say if your goal is to save for your child’s higher education, you will need to identify the year in which you will need the funds, the amount that you will need depending on the university in which you wish to send her/him, and so on. The quantification of the goal amount will help you plan better.
Take Stock of Your Financial Position and Then Set Goals
The goals that you set should be realistic and based on your current and future income. You will also need to take stock of your current and future expenses and your ability to save. Clarity about your expenses and the possibility of cutting them down will help you estimate the amount of savings that you have and therefore set realistic goals.
Attach a Time-Frame to Each Goal
Random goals like owning a home are not motivating enough for you to save and invest. Instead set a timeframe for your goals so that you can invest your savings in a variety of instruments like fixed deposits or mutual funds after looking at their benefits. Some goals like planning for your retirement or your child’s education have a set time frame and so require discipline in savings and investing to build the necessary corpus.
Invest in the Right Instruments
Now that you have a set goal with a specific time frame, you need to work towards achieving it. This means adopting a disciplined approach towards curtailing your expenses and savings. And using the saved funds to invest in a variety of instruments.
Fixed deposits in India are one of the most popular and safe options used by people to park their savings and earn a fixed return. You can even explore other options like investing in mutual funds or equity markets depending on the time frame of your financial goals and your risk-taking ability.
The best way to achieve your long-term financial goals is to start working towards their achievement in a disciplined manner. Start saving early and open a fixed deposit account for a longer duration besides exploring other avenues of investment too.