Essential Non-negotiable financial goals to set

“Financial goals are the backbone of any successful financial plan” – Dave Ramsey.

Why do we engage in a job, start a venture, work hard, and keep pushing? The answer is – to fulfill our dreams. It may be living a lavish life after retirement, buying a car, or something entirely different. 

Whatever they may be – setting clear financial goals in advance is crucial to achieving them. After all, they keep you accountable and relevant while helping you create a solid financial plan.  

Yet, sometimes, we miss out on adding a few non-negotiable ones to the list. Those who ensure that no matter how grand or small your dreams are, you at least get the promise of a stable and secure future.

Do you think you have them on your list? Let’s find out.

Financial Goals – What Are They?

We all save and accumulate some of our income to spend it on something bigger and more meaningful later. That is what a financial goal is.

Broadly, it has three types: short-term, medium-term, and long-term.

1. Short-term Financial Goals : Includes small, foundational financial objectives like setting up an emergency fund, paying off small debts, creating a budget, etc.
2. Medium-term Financial Goals : The main aim is to improve your financial and lifestyle condition by helping you clear off huge debts, start a business, fund higher education, etc.
3. Long-term Financial Goals : Helps in achieving big and expensive goals like retirement planning, wealth accumulation, and mortgage payoff.

Interestingly, every person has a different mix of these goals – thanks to several hyperpersonal factors like personal background, dreams, income, savings, and more.

However, according to experts, one financial goal should necessarily be a part of every earning individual’s list of goals. 

Wondering what that is and why? Let’s dive in.

Financial Freedom – A Non-Negotiable Financial Goal You Must Have

No matter how contrasting our financial goals may be, the point of setting them is mostly the same – to live a wholesome life. Financial independence earns us exactly that.   

In India, more than 69% of the population feels insecure about their financial standing. Why?

Because they’re not financially free yet.

Financial freedom signifies the ability to make life choices without financial limitations. Achieving it implies having the resources to do the following:

• Pursue personal passions
• Support loved ones
• Maintain financial security
• Safeguard the future

While short and medium-term financial goals are significant, they should be seen as stepping stones toward the ultimate aim of financial freedom. That is the guiding principle for making informed financial decisions today and securing a more prosperous tomorrow.

Financial freedom is a common denominator in a landscape of diverse financial ambitions. It surpasses individual preferences and income levels, making it a universal aspiration. 

This is a vital reason experts label this goal as the ultimate “non-negotiable” financial goal for everyone.

Tick off a Monetary Milestone with These 6 Simple Tips

According to statistics, only 57.9% of Indians believe they possess complete financial freedom. Quite staggering, right?

But do not worry – you can make it to the list too.

Here are some simple tips that can help you achieve the non-negotiable monetary milestone of financial freedom:

1. Develop a Financial Plan

About 43% of individuals with a financial plan save 50% more each month. But that’s not all.

Planning is also the stepping stone to achieving financial goals.

So, start with devising a concise financial plan that enlists all your financial goals, financial freedom investment goals, timelines, and strategies.

This will help foster mental clarity and ensure you are motivated.

2. Start Budgeting

Research states that 83% of people who set financial goals tend to feel better about their finances after just one year. Why?

Because it involves budgeting.

Financial planning is futile if you do not have a proper budget in place. Hence, build a smart annual budget plan for all your savings, expenditures, and investments.

This instills a sense of discipline and ensures mindful use of funds in the long haul.

3. Repay Debts

Debts, whether big or small, are enemies of financial independence. 

So, if you have a decent amount of savings piling up, exhaust it on clearing off all your debts – first and foremost.

Reduce the burden of unnecessary EMIs and costly interest on your income, then move forward to other goals.

4. Spend Less, Save Big

No matter how much you earn, it is important to save a substantial portion of it to achieve financial freedom. At the minimum, aim to reserve at least 20% of your monthly income as savings.

Additionally, it is equally important to reduce splurges and not exceed 50% for expenditures to accomplish all sorts of financial goals. 

5. Diversify Investments

Being too meek or aggressive with your investments can negatively impact your financial freedom and investment goals.

So, make smart decisions by taking the expert’s advice about diversifying your investments. Why do we say so? Because, a balanced portfolio allows you to reap good returns and minimize risk at once.

6. Leverage Tax Advantages

The government offers multiple tax advantages to ease the tax liabilities of people. But often, we sideline them.

So, the next time you file your annual return, assess which tax advantages and subsidies you are eligible for and use them to increase your savings and investments and reach your financial goals more efficiently.

Wrapping Up

You can set a gazillion financial goals. But if achieving financial freedom isn’t one of them, trust us –  the list needs a revision.

After all, financial independence not only empowers you to face an uncertain future but also puts you in a favorable financial position by instilling healthy financial best practices in your lifestyle.

So, don’t miss out on adding this non-negotiable financial goal to your list.