15 July, 2020

Financial Goals

people

With so much going on in the world today, life can seem more chaotic, and priorities may change. It’s a good time to reflect on your financial goals and make adjustments as required.

 

Having clearly defined goals is an effective way to save money and grow wealth, but it involves having a flexible, strategic plan for managing your money and your goals. Chances are you have multiple financial goals. Common ones include setting aside money for emergencies, funding a child’s education, building a retirement nest egg, buying a house or taking a dream vacation. Think about what goals are most important to you.

 

Prioritize your goals

There’s no one “right” way to achieve your various goals, as the path you choose depends on your individual circumstances and preferences. Regardless of the uncertain environment that the global pandemic has created over the short term, your long-term goals will likely not change.

 

Therefore, you may want to focus on getting through your goals in order of their urgency. For instance, as financial conditions become more challenging given the current situation and its ongoing impact, most people would be well served to focus on maintaining an emergency fund. Having a cushion of adequate cash flow will help you deal with unexpected expenses or loss of income. Similarly, prioritizing debt reduction can reduce the amount of interest you owe and gives you more money for other goals.

 

The potential downside of tackling your goals one by one is neglecting your financial big picture. While you may not be sweating the small stuff anymore, you could be losing focus on more complex and daunting goals, especially those like retirement that may be in the distant future. 

 

To help ensure your success, don’t oversimplify your savings plan and give yourself enough time to reach larger, longer-term objectives.

 

Tackling multiple goals

Alternatively, you may consider your goals equally important or prefer a more balanced approach to saving money. Taking on all your goals simultaneously ensures they each get some attention. After all, life is multi-dimensional so it can make sense to reflect this reality in your savings plan.

 

However, if you’re not careful, you can spread out your money too far. The challenge is to properly distribute your funds across goals while ensuring that urgent near-term goals are fully addressed. Without a doubt, a multi-goal savings approach is more complicated and it can be harder to manage all the moving parts.

Bucketing your goals first by priority and timeframe can bring clarity and structure to your plan. Using a percentage method may also be helpful, where you divide your monthly savings amount across your different buckets, allocating the most to your needs-based objectives.

 

A customized approach to your goals

The route you choose when it comes to establishing a plan to meet your goals depends on your personal situation.

 

Part of my role as your Financial Advisor is to provide you with practical advice and guidance in determining not just what your goals should be, but the smartest way to accomplish them that takes into account your unique circumstances.

 

We can work with you to set your short-term and long-term goals that reflect both your personal needs and prevailing conditions. To learn more about how we can help, call our office today.