What is goal planning?
It is rightly said “If you don’t know where you want to go, then it doesn’t matter which path you take”. Irrespective of which stage of life you are at, goal planning must be the core of your financial planning. Goal planning relates to setting financial goals and developing plans to achieve them. Your financial goals can be short-term and long-term. Short-term goals can be achieved within a span of 1-3 years. Examples are setting budget, building an emergency fund, buying a car, planning an exotic vacation and others. Long-term goals usually take a longer span of 10-15 years or even more. Examples are planning for retirement, buying a home and others. When you categorise your goal into different buckets, investing for it becomes based on the risk profile.
Benefits of planning your future goals?
If you don’t plan your future goals, you are never going to achieve them. Goal planning helps you to manage your finances successfully. Goals provide you the required direction and motivation. Moreover, you get a yardstick to measure your progress towards the financial goals. Goals will help you to bridge the gap of “where you are” and “where you want to be”. These prevent you from spending more than you have planned for. You already know what is the next expenditure on your agenda. In this way you can avoid surprises and stay away from the vicious cycle of credit card debt. Additionally, you can face major risks of life with confidence and avoid any vulnerabilities.
How this goal planner can be used?
This goal planner enables you to develop a comprehensive plan for different kinds of financial goals like buying an asset, saving for education, planning for marriage, retirement planning and other goals. This planner considers your entire gamut of investment needs while advising a corpus to achieve them. It makes sure that nothing is left out while building a financial plan and acts as an absolute plan to examine your needs. You need to enter the goal amount and investment horizon. Based on an assumed rate of return, the planner gives you monthly amount that you need to contribute towards goal achievement.