How To Set Financial Goals While Doing Goal-Based Financial Planning?

As inflation keeps increasing and the value of money per unit keeps falling, the best way to protect yourself is to start goal-based financial planning. In these times of economic volatility, the only way to build wealth is to set your financial goals early on and use them as your guiding light for all investment decisions.

The next question here is: how do we approach goal based financial planning? Simple, all you need to do is set your financial goals. With basic financial literacy and money management skills, you will be all set to carve out a complete path of wealth creation for your future. In this blog, we will help you embark on this journey of goal setting.

1. Step 1:

Examine your monthly income and assess how much you can save every year. Consider your monthly expenses, how much you can afford to cut down on, and how much you’d like to invest. This will require a significant amount of budgeting from your end. You can also follow the 50-30-20 rule, where 50% of your income goes to needs, 30% to wants, and 20% to savings.

2. Step 2:

Determine your targets for wealth creation. Do you want to save for your higher education? Are you interested in buying real estate in the future? Do you want to plan for your retirement? Are you saving for a solo trip? Reflect on what goals you want to achieve with the money you aim to invest.

3. Step 3:

Break down the specifics of your goal. We are not asking you to get into precise technical details, but have a rough idea of how much you want your investment value to be on a temporal basis. For example, you could invest in instruments that give you 2% more returns on your money than the average inflation rate every year. Or, you could set a goal of growing your annual savings by 10% in 5 years. Depending on your overarching financial goal, make a specific list of sub-goals.

4. Step 4:

Based on whatever goal or goals you choose, take the help of a digital wealth management platform like Tailwind to chart out an informed investment map for yourself. This will help you take the right investment decisions and ensure you aren’t blindly putting your money into everything that glitters. Our algorithm is designed to understand your goals and suggest investment options that best suit their trajectories. We have a team of expert wealth managers who can help you operationalise goal-based financial planning. You can also start by roughly deciding how much of your savings you would like to invest in different financial instruments.

5. Step 5:

Do focus on minimising risks and investing in a disciplined manner while setting your goals. This means don’t set unrealistic goals that require a high-risk appetite or inconsistently fluctuating investments such as the stock market. With these five simple steps you can ace your Investment journey!


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