Integrating your financial goals into your lifestyle

Managing your finances is one of the most important steps towards achieving your life goals. But financial objectives are different for different people. Some want to save for the future, others want to save money for a dream trip. Whatever the objective, everyone should set practical financial goals for better lifestyle management, and begin focused saving, spending, earning and investing to achieve their dreams.
Nov 2022
6 mins read
Knowing your financial goals – and acting on them

Financial goals can be divided into 3 segments:

  • Short-term goals: Every short-term goal is a way to meet the larger goal of saving money. It gives you a good idea about how you should go about saving and spending your hard-earned money in the coming 3-6 months.

  • Medium-term goals: Medium-term goals could include significant plans like a long cherished vacation or a new car.

  • Long-term goals: When it comes to buying that dream house or saving for your family’s future, you need a long-term goal to help you achieve your target.
Now, let’s look at how you can optimise your lifestyle around your financial goals:

  1. Know your expenses and savings
    Subtract your rent and other expenses from your income to find out how much money you could save each month. Once you have a clear number, you can make the right investment choices to maximise your savings as per your needs. For instance, you could switch from traditional fixed-income avenues to mutual funds for inflation-adjusted and market-linked returns. Try to discipline your spending by fixing a budget and planning purchases ahead of time.

  2. Set short-term goals
    Start your financial journey at the beginning. Try to focus on your immediate goals, pay off your debts, and make smart investment choices. Choose investment avenues like mutual funds to build a market-linked portfolio that provides risk adjusted returns.

  3. Build a portfolio
    Start your investment journey gradually through SIPs in mutual fund, investing small amounts every month and getting acquainted with the market. You can then invest in equities with a long-term horizon to build your wealth over time.

  4. Diversify your income streams
    Apart from the steady salary income from your job, plan for other income streams that can help you save and grow. For instance, you could freelance as a consultant.

  5. Save for an emergency fund
    The pandemic has cost thousands of jobs and devastated businesses. It has been an eye-opener, and a stark reminder to keep an emergency fund ready in case the worst happens.

  6. Learn from your mistakes
    Setting goals is not a one-time process. It needs to be continued throughout your lifetime. Most importantly, don’t lose hope if something doesn’t go as per plan – it will only help you plan better. Learn from it and come back stronger.
Life is all about adapting to change and working diligently towards a better tomorrow. Understand your needs and your prospects, set financial goals and objectives, keep an eye on the target and start investing for your future today!
PGIM India Asset Management Private Limited
(CIN - U74900MH2008FTC187029)
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This is an Investor Education and Awareness Initiative by PGIM India Mutual Fund.
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