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What is goal-based financial planning?

March 31st, 2020

Saving money

Saving More, Worrying Less

Do you find it hard to save money? Is the question ‘What is the easiest way to save money’ always on your mind? Most of us find financial planning challenging. Several people associate financial planning with saying no to a good lifestyle or quality living. But that doesn’t have to be the case. Personal financial planning is all about identifying your needs, wants and striking a balance between the two. Financial goals ensure an organised approach to regular expenses. But, they can also help factor in the holiday you may have wanted to go on for a long time. More importantly, financial planning and analysis can help reduce any stress connected to saving money. Here are six simple ways to help you go about your personal financial planning.

Read: Overcoming A Personal Financial Crisis

Set your financial goals
When it comes to saving money, it is imperative to have a direction and a destination in mind. Setting financial goals in place is the first big step towards saving. If you are thinking – how do I determine my financial goals, think about what you want to accomplish, in the coming months and years ahead. Decide what you want to save for. It could be a new car, a vacation, education, investing, or even saving for a rainy day.

Prioritise your goals
If you find yourself with too many financial goals, circle the top two or three that you want to accomplish. Then, zero in further, arranging them in order of preference and start setting aside money accordingly. Research suggests that focusing on a single savings goal leads to a higher probability of reaching the target.

Clear your credit card bills
When it comes to planning your finances, debt can be a scary four-letter word to encounter. Make sure you clear your credit card bills so that you can direct all your focus and funds to meet your goal. Another way to curb credit card usage is to set a budget for how much you can spend. This practice can help you avoid overspending on your credit card.

Maintain a dedicated savings account
Maintain a separate account for savings. Try to deposit a fixed amount every month in this account, if not, deposit however much you can afford, but be as disciplined as you can. Refrain from using this account to spend and never assume the funds in that account are available for spending.

Look for small improvements
Small changes can often lead to significant results. Reduce a few minor expenses every month. You can start by cooking a home-cooked meal instead of going out on a Friday night, rent a movie instead of visiting a theatre. Plan your meals for the whole week, make a shopping list and make one big grocery trip. Before you know it, these little changes will help you gather up a sizeable amount of savings.

Make the most of technology
Thanks to technology, we have achieved great things because they enhance efficiency. From simple things like ensuring you meet your daily water intake goal, it can also help you in reaching your financial goals. There are various capital finance apps that help you see where your money is going. Because you can use them to keep track of the amount you spend, you also get into the routine of registering how and where you are spending your money.

The truth is, there are many ways to save money. Out of all the tips mentioned in this financial goal planner find the methods that work best for you. Gradually, start incorporating them into your life so that you can ease your way into this lifestyle change. Start small, but start now.

Also Read: Financial Planning If You’re Moving Abroad

One Response to “What is goal-based financial planning?”

  1. XM says:

    This is really help full