Financial Goals are achievable through S.M.A.R.T techniques

Accomplishment of financial goals are one of the major fundamentals towards financial wellness. It is achievable if goals are S.M.A.R.T. We can say that nothing astounding will happen to you unless you gather the necessary courage and have strong conviction to accomplish your goals. Your aspirations are achievable through implementation of your Financial Plan.

As Certified Financial Planner in Kolkata, we urge you to determine your financial goals by considering your life cycle stages. It begins from infancy and continues till you die. First dependency stage (student life) is till you join your profession or job or business. Second dependency means your post-retirement period till you die. You can come across unique experiences in different stages. Each stage is very significant and distinctive.

Working span (earning phase) has its own necessity. You have boundless commitments and responsibilities towards your potential dependent(s). Additionally, you have to accumulate your retirement kitty within your working phase of life.

In the Indian context, usually you join in your profession or job or business ideally at the age of 23 – 28. Between 28 – 33, you marry and may be after 2 – 5 years you extend your family.

You may take house loan and/or car loan. Moreover, you start bearing educational expenses for your children, i.e. for schooling, graduation & post-graduation. You will have to bear household expenses, lifestyle expenses, expenses towards your dependants, insurance premiums, EMIs towards loans, etc.

Once you start earning  you have to have necessary investable surplus designated towards various life stage goals.

Provision for retirement is most important but often it is neglected. Your working span is only for 25 – 30 years. Then comes retirement, which refers to starting for a new life.These years (earning phase) are called golden period of life. If you take any misstep (financial/non financial), it’ll be too costly for you. You may hardly get time and scope to offset the loss. You must consider your realistic concerns and prioritize your needs for different life cycle stages.

‘A goal properly set is halfway reached.’ Lydia Sweatt

Each life stage has different requirements in terms of financial goals

Set your S.M.A.R.T financial goals

• Specific,
• Measurable,
• Achievable,
• Realistic &
• Time bound.

Needs Vs Expectations

You need to be quiet to listen to your inner mind to set your goals in life.

You may have too many expectations listed for you as well as for others. As Financial Advisor in Kolkata, we have been experiencing that managing expectations play a vital role during earning phase. Otherwise, you’ll be disappointed. You may be rejected by others while you don’t fulfil other’s expectations at your cost. We need to admit that there is no limit for expectations.

At times, you have to say ‘NO’ to yourself or others while you rationally consider the difference between “needs” and “wants”.

Aspirations Vs Financial Goals

Aspiration is a strong desire to achieve something. Aspiration is emotion-based inner experience. At times, it is not rationally possible to fulfil certain aspirations within limited timeline. Aspirations are intangible. But when you set financial goals in life, it becomes easier. Financial goals appear to be measurable, unemotional (rational) and realistic. Aspirations are just your imaginary feelings. As soon as you set your goals, you can give a real shape to your needs to achieve it.

Therefore, aspirations are unlike goals, but aspirations are much needed to set your goals.

Your Financial Goals

Major Goals (based on Financial Plan)

• Children’s Future (i.e. education, marriage & kids startups),
• House Purchase,
• Retirement,
• Car;
• Vacations &
• Loan pre-closure, specially bad loans etc.

Other Goals (based on financial plan)

• Estate Planning,
• Income Tax Planning
• Own study,
• Plan for sabbatical,
• Home renovation,
• Change of job or quitting job and start own business,
• Divorce plan (transition),
• Windfall &
• Death or disablement due to accident or illness etc.

Set specific time bound financial goals

Setting short-term, medium term, long term & distant goals are fundamental issues while you set goals

Financial goals are driven by specific future needs. As SEBI Registered Investment Advisor in Kolkata, we intend to counsel you to prioritize your action plans. Categorize your action plans as “Now”, “Soon” & “Later” as per priority.

Now means you need to take immediate step to achieve your financial goals.

Soon means you need to do it soon but not as urgent as Now.

Later means which are least important and you can postpone.

When you don’t have financial goals, you may decide to do something randomly. You cannot categorize them as “Now”, “Soon” and “Later”. Ultimately, you become tired and hopeless when you don’t have defined goals.

When your  goals are not S.M.A.R.T, you are like a child tottering in a toy shop. You grab a toy and let it go by looking at another toy.

Have you ever experienced that in case of hurdles/obstacles at work place, many people give up or try to look for short cuts?  Are there any short cuts in wealth creation too? Practically speaking, you need to go through financial planning processes and tools to be on track of your financial life.

While you have objective(s) in your life, you must have goals. Persistently stick to them till you achieve your defined goals within predefined time horizon. You may have to alter your strategies based on personal and macroeconomic factors. To achieve goals, you must set a direction. Without goals, you are directionless. You have to understand the power of your subconscious mind. Your subconscious mind works when your goals are S.M.A.R.T.

Going one step further, you identify your own sensory receivers. Accordingly, communicate your goals through subjective aids like visuals (images), audios (spoken words) or physical objects (touches).

Appropriate strategies must be developed in order to accomplish the financial goals having different time frames

You need proper communication with yourself while setting financial goals

• Write down your list of  goals,
• Quantify the amount of each goal,
• Define the time horizon of each goal, i.e. set mm/dd/yy for each goal,
• Mention the details of goals and write descriptions by using present tense,
• Prioritize your goals,
• Read your goals every day with conviction while you’re in fresh mind,
• Visualize your goals clearly and transparently. Think emotionally about your goals. You have to develop your sense that either you can touch, you can see, smell or hear,
• Note down auto suggestions (self induced suggestions) as you’re obsessed to achieve your goals. You may think these are illogical. But to us, these are essential. You can only recognize the power of subconscious mind and auto suggestions while you achieve your  goals by tracing your past steps &
• Try to understand your body language/sensory receivers for proper communications. You may either be visual, auditory or kinesthetic. You have to visualize your goals according to your body language/sensory receivers.

These are sensory receivers for your learning or pursuing styles.  Use your own style effectively. You can see the difference while you implement.

Conclusion

The superiority of financial planning processes is that you can review and update your goals and monitor the progress which depends on your risk profile, investment time horizon, prevalent market conditions and investment amount till you achieve your financial goals. Your financial well-being depends on your progress towards goals. As Fee Only Financial Planner in Kolkata, we strongly encourage you to be write your financial goals in your Financial Plan.

You can’t score in a basketball game without opponent’s basket. Financial goals are like baskets. You need to target it. Hire a professional for proper guidance.