Effortlessly manage your Dreams to make them Real
We all have some dreams in our life regardless of our stage of life. Some dreams are practical and achievable and some are not. We can’t deal with the impractical and intangible dreams but achieving the practical ones are highly possible with some little effort. Let me discuss on this matter today.
The first and foremost step of achieving any dream is to make it a goal of your life. A date attach to a dream is goal and a value/cost attach to a goal is a financial goal. Studying or working hard to get good result at the end of year may be a goal but this is not a financial goal. Buying a house or car, savings for retirement, children education, dream vacation with a probable date are examples of financial goals.
Follow the steps to tackle your dreams or financial goals.
A.Give Date to each of your goal:
You may have many dreams in your life starting from weekend tour to buying a house. Give a date to each of your financial goal i.e. when do you need money to fulfill your goal.
Like- You may want to buy house after 20 years or may be required money for your children higher education after 15 years. In this way put probable time frame each of your goal. This will help you to classify the goals into short term, medium term and long term goals.
B.Prioritized your Goals:
Give importance level to each of your level. Take a scale of 1-10 where 1 indicates the lowest priority and 10 is the highest priority.
C.Attached current price/value to each of your goal:
Now you know your financial goals and their importance. The next step is to put current value or present cost to each of your goal. Like- As per the current economic condition, one may require $30,000 to buy a house of your choice and level. You put time and present market cost to each of your goal.
D.Calculate the Future Value amount of each Financial goals:
First calculate the future value each of your goal. For this purpose, you need to adjust the annual inflation rate with the present value.
E. Calculate how much you need to save each month:
After getting the future value, you need to calculate the monthly savings amount for each of your goal. For this purpose, you adjust the average annual return percentage with the future value.
You need to invest pre-determined monthly amount for each of your financial goals in different account/area, like- some portion in bank savings account or some in different mutual funds or some amount may be in long term equity. As you know, the average annualized return differs in different investment areas, so adjust the return percentage as per the investment area.
F.Automated Payment System:
Once you have calculated the monthly savings amount, make an automated money transfer system from your bank account to the predetermined investment area in the beginning of the month so that the money invested as soon as your salary/income credited to your bank account.
In this way, the amount will be forcefully invested for the goal and your spending will be in control for rest of the month.
G.Don’t withdraw money for other reasons:
once your savings begin, you may be tempted to use that amount for any other purposes. But keep the investment in such a way that you’ll not be able to access the money at any time you want. Don’t put the amount in normal bank savings account because that is easily available through ATM card.
You may find these entire steps tiresome job, especially calculation part. So, I’ve designed a simple Future Financial Goals Worksheet for you. You just put the goals details and the present cost on that sheet and the worksheet will automatically calculate your monthly savings amount depending on your input data.
This Worksheet is completely Free, you just need to put your email id where we can send the download link.
Your Free Future Goals Worksheet
The worksheet will only guide you but overall you need self-confidence and commitment to fulfill all of your tangible and practical financial goals.