Top 10 Must Have Financial Goals

In my recent articles, I have been talking about financial goals. And I might have given you a few examples of what those financial goals might be.

Today I want us to talk about some good examples of financial goals that we might have. This article might be leaning to anyone who has already started working or already running their businesses. Generally, though, financial goals can apply to anyone who has started college depending on their desire for a better life.

So, how do you set up goals? Are you the kind of a person who sets up New Year resolution kind of a person? Once you set the goals, do you find time to go through them and see how much you have progressed towards achieving them? This is a topic for another day.

Financial goals are more substantial than wishes or dreams. Sometimes our goals do start out as dreams and with time and with an action plan behind them, they can become a reality.

To realize your financial goals, which need an investment in the form of money which you have been saving and also which needs to take time to be realized, you will need to have a plan that you can work with so as to realize them.

So, as a person who likes setting goals, I think the following 10 financial goals are something work looking into as you start your journey to financial planning and as a way to put up your saved money

Having a well-funded emergency fund

This can be a good short term financial goal. You will need to know, however, in as much as it is a short term plan, it has its important roles that it can play hence the reason why I believe it can be a good financial goal.

What are the benefits that this fund can give you?

• ·         It will give you peace of mind since you know in case you found yourself in a fix; you know you have a reserve that can help you sort it out.
• ·         It will act as a cushion in the case of unexpected emergencies like loss of your job, low profits in your business or a large medical expense.
• ·         It plays a crucial part in money management as once you have your fund all set up, then you can save for the other financial goals you might have.
• ·         It can as the intermediate source of fund between your pay check and your investment account so that you will not need to interrupt you long term investments

Imagine what a good emergency fund can do in reassuring you in case of a life changing situation such as having children, building your first home, or even starting up your own business

   Getting out of Debt

One thing I like about goals is that they are not limited to any level of income. For you to be on top of your financial game, you will need to get out of debt as quickly as possible. 

Yes, we have both good debt and bad debt, but at some point, all debt is bad and you will need to pay it off completely. Even that mortgage you have for your house. Yes, you took that loan with great intentions but with time, seeing that deduction day in day out, it can become a bother, don’t you agree?

What can this help you do?

• ·         You will have full control over your money and this is the best feeling ever
• ·         You will have more money for saving and investing, don’t  forget, you even spend more and spoil yourself
• ·         It can make leaving a job easy especially if you do not like it
• ·         The stress of having a loan will just disappear

   Those credit cards you need said at least I do not have to pay 100% of the amount due, please, change that. Pay the amount slowly as every time you do not pay it, a huge interest is being charged and you balance accrues.

  Plan to Retire Early

Who wants to work until they are in their 60s? Well, certainly not me. Some of us want to retire by the time we are 40, others by 50 years. How can you be able to achieve this? This can be done through the power of compounded interest.

Even when you love doing what you are currently doing, retiring early is one of those goals that out of all the people I have talked with the rate it very highly.

This early retirement might be voluntary; other might not be so voluntary. So whichever the case, this one of those smart financial goals we all need to have.

By planning to retire early, you will be allocating more to your investment portfolio. Hence this will lead to a bigger portfolio early enough and hence there will be no need to work so much and hard to save for your retirement later in life.

  Creating multiple income streams

What is the surest way for having income insurance? A side hustle that you have turned into a money generating machine. Hence why having a side hustle should be a major financial goal.

Why would you need to have a side hustle?

• ·         It can create an avenue where the cash flow can be used to build up your early retirement fund
• ·         If you want to start a small business but you are not yet ready to leave employment.
• ·         This can also help you pay off your loans, credit cards etc.
• ·         With extra sources of income, it means you will not be depending on one single source of income.

You might hit on a snug when trying out what side hustle you can start. Keep on trying until you reach on the one that will be life defining.

Think about this financial goal as it can open up door for you that you never thought possible

Like Jack Ma once said, it is what you do after your 9-5 that build your wealth.

  Have enough but not too much or risk management tools-Insurance will cover for contingencies

Whenever insurance is discussed, especially in Kenya, it is like you are discussing a taboo.

Insurance is one of those things you most people currently in Kenya do not have adequate coverage for and at times, some are paying too much for the coverage that they do have. So, you will need to find a balance between the two and find what works for you.

Where do you need to find a balance?

• ·         In the case of life insurance, find a cover that is cheaper for you but at the same time a cover that is not worth much more when you are dead than alive
• ·         When it comes to motor insurance, look for the cheapest option with a reputable company and especially if you are a safe driver.
• ·         On medical insurance, make sure you take to cover that gives you adequate coverage and the balance can be sorted out by the emergency fund

Your role as the person looking for an insurance cover is to make sure you work with a reputable insurance agent, in this case, me, on a need basis to make sure you have adequate cover.

  Are you able to live on less than you earn?

By living less than on what you earn means that your budget is on the positive side and this is a serious financial goal.

This means that at any one given time you will always have lots of income and you will have more money to dedicate to savings, investments and paying off that loan.

Try to find ways to increase your income but this strategy can only be effective if only you are able to spend less than you earn and the difference can be used to improve your standard of life.

  You have an addiction to things you do not need?

I know this may not really be a financial goal per se but it is one of the major hindrances that may be keeping you away from realizing your financial goals.

This kind of addiction can make you spend a large chunk of your income or savings to getting this you do not need.

  Get to do what you love

For me, the ultimate financial goal means independence. This means that you are able to do what you want, whenever you want. If this is not your ultimate goal, I don’t know what is.

Having any one of the above-mentioned goals should be able to create a way for you into doing what you want to do and what you love to do.

This can be achieved by not having debts, living on less than you earn and definitely a large investment portfolio to back you up.

You cannot retire to nothingness.  You need to be able to retire and do something that you love. Is it traveling the world, training, among other things? 

Since you cannot be doing anything, you need to be able to do something that feels good with you that makes you enjoy life and feel good about yourself.

  Share Share Share

Money can only do well more if it is shared. Share it with the less fortunate. Find a course that you are passionate about. This will mean that your money does not control your life

Look around the richest persons in the world, you will find a common thing across all of them and that is giving.

  Leave your Financial House in Order in the Case of death.

No matter how you choose to live your life, one of your greatest gift you can give your family is making sure that they feel better off as a result of your life. This means making sure that there is adequate provision for your dependents and that there is no financial burden that is left for them to carry.

How can you be able to achieve this?

• ·         Make sure you have adequate insurance coverage especially the life insurance
• ·         Ensure that all your debts are settled and if there is a particularly large one ensures that there is a term insurance plan that can pay it off.
• ·         For the countries where estates are taxed, get enough insurance cover that can cover those taxes especially if the estate is big.
• ·         Teach your family and dependents some financial tips that can help them for the rest of their lives.

To have success in finances, it has got nothing to do with luck. It has everything to with being deliberate with your financial goals, having a strong plan to how you can achieve those goals and making those things a part of your habit.

 “Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.” —Pablo Picasso