Setting Financial Goals

To give your savings effort extra heft, consider setting financial goals to ensure your savings plan will give you enough money to use when you need it. For example, while studying abroad you may want to travel to other locations, how do you pay for those expenses? Setting up a savings plan with the study abroad trip in mind is the way to achieve the overseas airfare goal. Once you figure out your goals, you will be able to calculate how much you will need to attain the goal and then further calculate what you will need to set aside each month.

Goal-Setting Tips

1. Determine what your goals are: Make a list of your goals—large and small. Don’t worry about costs right now.
2. Categorize your goals by the time you think it will take to achieve them:
   • Short-term goals you will achieve within a year. This could be purchasing a piece of furniture or moving out of the dorms and into an apartment.
   • Mid-term goals you will achieve within one to five years. This could be financing the travel and living expenses for a quarter- or year-long study abroad.
   • Long-term goals you will achieve in more than five years. This could be purchasing a car or a condo. This could also be the beginning of your plan for retirement.
3. Use a financial goals worksheet to map out your savings plan: during your university years you will probably be thinking about saving income from simple sources like Pocket money and summer jobs. Many of your short- and mid-term goals can be achieved from those sources. Over time you will probably get more sophisticated with your income sources: stocks, bonds, money market accounts. Those sources will make attaining your big-ticket mid- and long-term goals a reality.

Remember that the first thing you should do is to write specific goals about what you want to do with your life and your money. Finances can affect many different areas of your life. Your goal to travel the world affects how you will plan your finances. Your goal to retire early is dependent on how well you handle your finances now. Home ownership, starting a family, moving or changing careers will all be affected by how you manage your finances. Once you have written down your goals you will need to prioritize them. This makes sure you are paying attention to the ones that are most important to you. You can also list them in the order you want to achieve them, but for a long-term goal you should be working towards it while working on your other goals. Start by setting long-term goals like getting out of debt, buying a home, or retiring early.

Create a plan – A plan will help you reach your goals. The plan should have multiple steps. The first part of your plan should be to get control of your budget. Your budget is key to success. It is the tool that will give you the most control of your financial future. Your budget can help you reach the rest of your plan.

Stick to your budget– Your budget is one of the biggest tools that will help you succeed financially. It allows you to create a spending plan so you can focus your money in a way that will help you to reach your goals. A budget lets you decide how to spend your money. Without the plan, you may spend your money on things that are 31 not important to you. If you are married you and your spouse need to work together on the budget. This will help you to achieve your goals together.

Ask for financial advices – Once you are ready to grow your wealth and begin investing you should speak to financial consultants to help you make your investment decisions. A good consultant will share the risks involved in each investment and help you work towards your goals as quickly as possible. A financial consultant can also help you with your budget.

 Check your understanding:

• Why it is important to organize your personal finances and make personal financial planning?
• Name the main principles of financial management.
• Please write down your financial goals! Write the financial plan details how to accomplish the goals.