Not considering your stage in life, you are expected to have some short and long term goals. Setting substantial and practical goals, following them, and tracking your progress is the key to success in achieving financial freedom.
If you are married, it is absolutely essential that you and your spouse both share the same financial goals. Or else, achieving your financial goals is more or less impossible. Build your financial plans together, and review your progress together to make sure both of you are contributing to the same goal.
You also need to formulate your short-term, mid-term, and long-term financial goals. Some common financial goals are new home, school savings, retirement savings, emergency fund, travel on vacation and what have you. Once you and your spouse have agreed on your goals, the next step is to determine a good estimate for how much money you’ll need for each of them. Figuring out an accurate amount involves discussion about the goals, for instance, if you are saving for your children school, what percentage do you want to pay? Also, do you want to send them to government or private school? Retirement savings needs depend greatly on the lifestyle you plan to leave once you are retired, as well as when you plan to retire.
Always make sure you prioritize each of your personal goals in order of importance, and then determine how long you have to save for each of them. Retirement could be many years away, but your short-term goals could be in a year or two. Next, estimate how much interest or capital gains you’ll expect to see in the accounts where you are saving your money. Though capital gains are never guaranteed, you can use an estimated average for these purposes.
Also figure out how much you’ll need to save per month to achieve your financial goals. Don’t be discouraged if the money is overwhelming. The important thing is to have a set of tangible financial goals to work toward. On a monthly or quarterly basis, you and your spouse should review your progress, and continue to improve on your plan. If you aren’t meeting your goals, revisit your financial budget to see if there are any areas where you can cut expenses in order to free up funds for savings. In addition, use this plan to allocate any extra amounts you may be given from bonuses, inheritances, and so on.
By Tiamiyu Adio Ismail
