Plans without goals are like driving without a steering wheel – you can’t be accused of doing nothing but you have no way of knowing whether you’ll still be in one piece when you stop driving, let alone know whether you’ll reach your destination.
So, quick! Here are 6 essential goals you need to lock your sights on as you plan your personal finances.
So, you achieved the goal of getting a dream job. And now, it’s time to get that dream home. (Hell, with all that dreaming going on, it’s a wonder you’re getting anything done at all. But that’s just us messing with you ‘cos we love you!)
In case you’re thinking what’s the big deal with owning a pad of your own, or worse, if you’re thinking what’s the freaking hurry, well here’s something to chew on: real estate is the only capital investment that doesn’t depreciate. It’s also the only investment that can give you capital gains, operating profit, tax savings and physical security.
A nice package, don’t you think?
When speaking about financial planning goals, the most ignored one isyourlifestyle goal. But in fact, this is a silent thief. It quietly eats away all your money unless properly planned. All your expenses, right from the grocery buys to eating out at your favourite joints come here.
So next time when you shudder at the thought of buying a sedan that you eyed, remember, this is your goal now and you have to plan for it.
Even the most perfectly planned drive runs through rough patches at times. Life’s no different. Nothing like losing your job, getting hospitalized, or meeting an accident, to set you back by a few thousands or (gasp) lakhs. Imagine a situation when bad luck strikes and you don’t have an emergency fund. That, my friend, is the surest way to debt and damnation.
So, if you have not counted contingency goals in among your planning goals, do it today. Scratch that. Do it now.
Goals to Beat Inflation
Inflation is the little red devil that bleeds you dry without your even knowing it. It’s like an air drag on your car, grinding your financial planning’s fuel efficiency into the tarmac.
Considering inflation at just 5%, the thing that you bought for Rs.1 lakh today would cost you 1.68 lakhs after 10 years. Extending this thought to all your investment plans, your buying decisions as well as unavoidable one-time expenses like children’s higher education, marriage etc are sure to break down in the middle of nowhere, if not planned well.
So make sure you build inflation into your investment calculations – it’s like having the number of the service station and the towing agency handy before you set out on a long drive.
Goals for Children
This one’s a no-brainer, really.
India’s big on education. So your first stop here? Your children’s education.
Also, Indians like their weddings to be big affairs (pun unintended). So, your next stop? Your children’s marriage.
In between, just so you don’t feel guilty that you’re making your kids live the same gadget-free childhood that you lived, you probably shower them with tablets, phones, pods, laptops, … well, you get the idea. Factor these in too, when you plan for your children.
Now, that you’ve planned for everyone, there’s one person that you still haven’t planned for.
The future you.
When you think about retirement, there are two things that could happen. One, you probably hate the idea of stashing a small amount away every month for the next thirty years. Two, you probably hate the idea of thinking about your retired life right now.
But, the more you put this off, the more it’s going to come back to haunt you like a bad dream. Or a bad girlfriend.
So, start filling your retirement tank, but don’t shut it, and don’t forget about it.
With these 6 goals, your steering wheel should be back in place. Step on it!