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Sticking to resolutions is hard and we all know there\u2019s a lot of talk and pressure in January about getting fitter and being financially healthier. We all have different financial goals and aspirations in life. Yet often, these goals can seem out of reach.<\/p>\n
Identifying your financial goals<\/strong> Your financial goals will be specific and unique to a number of factors related to you, like your age, your interests, your current financial situation and your aspirations. Based on these, you need to develop your goals and establish a plan to achieve them.<\/p>\n If your New Year\u2019s resolutions include giving your financial plans an overhaul, here are our financial planning tips to help you create a robust financial plan for 2021 and beyond.<\/p>\n Have a clear objective<\/strong> Once the objective is clear, it\u2019s important to put a monetary value to that goal and the time frame you want to achieve it by. The important point is to list all of your goal objectives, however small they may be, that you foresee in the future and put a value to them.<\/p>\n Keep goals realistic<\/strong> Still feeling guilty about not meeting the unrealistic targets you set for yourself in 2020? Is it worth setting more achievable goals this year? Yes, it\u2019s important to keep your goals realistic in nature as this will help you stay the course and keep you motivated throughout your journey until you get to your destination.<\/p>\n Short, medium and long term<\/strong> This division of goals into short, medium and long-term will help in choosing the right saving and investment approaches to help you achieve them and it will also make them crystal clear. This will involve looking at what large purchases you expect to make, such as purchasing property or renovating your home, as well as considering the later stages of your life and when you\u2019ll eventually retire.<\/p>\n Always account for inflation<\/strong> You could use the \u2018Rule of 72\u2019 to determine, at a given inflation rate, how long it will take for your money to buy half of what it can buy today. The Rule of 72 is a method used in finance to quickly estimate the doubling or halving time through compound interest or inflation respectively. Simply divide 72 by the number of years to get the approximate interest rate you\u2019d need to earn for your money to double during that time.<\/p>\n Monitoring and reviewing your financial plan<\/strong> Finally make sure your financial goals are SMART<\/strong> Any goal, let alone financial, without a clear objective is nothing more than a pipe dream The New Year is a great time to make financial resolutions but, unfortunately, achieving financial goals isn\u2019t quite that simple. Habits become ingrained and hard to overcome. For some of us, the resolutions we set, financial or otherwise, can… Read more »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/3268"}],"collection":[{"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/comments?post=3268"}],"version-history":[{"count":0,"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/3268\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/media?parent=3268"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/categories?post=3268"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.generationwealth.co.uk\/news\/wp-json\/wp\/v2\/tags?post=3268"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nA financial plan should seek to identify your financial goals, prioritise them, and then outline the exact steps that you need to take to achieve your goals. Figuring out your objectives and matching them with timelines are the keys to setting financial goals.<\/p>\n
\nAny goal, let alone financial, without a clear objective is nothing more than a pipe dream, and this couldn\u2019t be more true when setting financial goals. It is often said that saving and investing is nothing more than deferred consumption. Therefore you need to be crystal clear about why you are doing what you\u2019re doing. This could be planning for your children\u2019s education, your retirement, that dream holiday or a property purchase.<\/p>\n
\nIt\u2019s good to be an optimistic person but being a Pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, being overly unrealistic can definitely impact on your chances of achieving them.<\/p>\n
\nNow you need to plan for where you want to get to, which will likely involve looking at how much you need to save and invest to achieve your goals. The approach towards achieving every financial goal will not be the same, which is why you need to divide your goals into short, medium and long-term time horizons. As a rule of thumb, any financial goal that is due within a five-year period should be considered short-term. Medium-term goals are typically based on a five-year to ten-year time horizon, and over ten years, goals are classed as long-term.<\/p>\n
\nIt\u2019s often said that inflation is taxation without legislation. Therefore you need to account for inflation whenever you are putting a monetary value to a financial goal that is far away in the future. It\u2019s important to know the inflation rate when you\u2019re thinking about saving and investing, since it will make a big difference to whether or not you make a profit in real terms (after inflation).<\/p>\n
\nIf you create goals just because you feel you should, you\u2019re unlikely to succeed in achieving them. We only achieve goals that we believe we must and can achieve; goals that are non-negotiables. So there is little point in setting goals and never returning to them. You should expect to make iterations as life changes. Set a formal yearly review at the very least to check you are on track to meeting your goals.
\nWe can help you to monitor your plan, making adjustments as your goals, time frames or circumstances change. Discussing your goals with us will be highly beneficial as we can provide an objective third-party view, as well as the expertise to help advise you with wealth planning issues.<\/p>\n
\nThis is a great way to set a variety of goals. SMART stands for Specific, Measurable, Achievable, Relevant and Time-Related.<\/p>\n<\/div>\n<\/div>\n
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