Setting a financial goal is the first step to achieving your financial objectives and creating a sustainable spending plan. That’s why, we are starting with this topic on our Rupee101 series.
Happy, Lucky and Chintamani (Who are they?) have come to Agra. It has been a long planned getaway for the three of them, along with Happy’s and Chintamani’s family.
During the journey, Happy told Chintamani that he wanted to start investing.
Chintamani: So, what are your goals?
Happy: Goals? I just want to invest my money, that’s all.
Chintamani: Let’s say you want to go to Agra. Like we are going. That’s like investing. But there are a whole lot of things that has to be done before you go to Agra.
Happy: Like?
Lucky: Arre, you need to decide you want to go to Agra first. And not to Timbucktoo!
Chintamani: Yes. And there are things like tickets, packing, arranging money for food, Booking hotels for stay, etc.
Happy: Ya, I got it. Okay, but how do I decide my financial goals?
![\Trip to Agra\](http://static.toondoo.com/public/r/a/n/ranjanvarma/toons/cool-cartoon-1045974.png "\Trip to Agra\")
SMART Goals
Goal setting is your map to reaching your financial dreams. Questions to ask yourself are:
Where do you want to go?
What is your vision for the future?
What would you do with your money if you didn’t have bills to pay or debt to extinguish?
Dreaming is a big part of goal setting. Let your imagination go wild: what would you like your financial future to look like?
But do remember to keep it SMART. SMART stands for Specific, Measurable, Attainable, Realistic, and Timeline
Needs and Wants
Before spending money on a goal, think about how important it is and whether it’s a want or a need. Ask yourself:
Why do I want this?
Do I really need this?
What is most important right now?
Taking Care of a Few Things
Having decided your financial goals is a very educative affair. It teaches you a lot about yourself and your own life. Having done that, a few things are worth taking note of. They are:
1. The time frame for your goals can be broadly classified into short term and long term goals. You may have a intermediate goal for say, 5-6 years, too.
2. If you find that after all of your planning and goal setting, your dream isn’t attainable as is? Does that mean you scrap the whole dream and move on to the next item on the list? Maybe! But there might also be another solution for you: consider “stepping down” your dream.
The Step-Down goal allows you to achieve a version of your dream. It may not be the exact goal you had in mind, but it will get you to the similar destination.
For example, if you want to go to Las Vegas, the step down goal would be to go to Goa and have fun.
Does this help you with setting your own financial goals? Let me know how I can improve this post and the series on Rupee101.
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nice article . A nice way to explain why we need goals . Hope the next articles in the series will talk about how to identify them .
Thats a problem i have , although i know i have to save for house , kids , retirement and I am saving around 40% of my income , I am not able to quantify my goals or my progress .
Please explain in next articles how to use the SMART rule for Goals
@Debashish Thanks.
Dreaming is a big part of goal setting. Let your imagination go wild: what would you like your financial future to look like?
Write your dream(s) down and put the note where you will see it every day. That will remind you of your dream and help you achieve your goal. Without a direction, dreams/goals just stay parked in your driveway.
Does that help? Or does it need a whole new post?
@Rajan ,
thanks for a quick reply . Will try t think on those lines ( whats your dream ) , can not think of any dream as of now though .