Financial goal setting is vital for taking control of one’s money. Goals provide benchmarks to work towards, and give satisfaction when one manages to achieve them. As per Kavan Choksi / カヴァン・ チョクシ points out, after one has set their financial goals, they must proactively take steps that help achieve those goals. Whether one wants to go on a dream vacation, increase their retirement contributions or buy a new house, following appropriate financial strategies and systematically saving can help set a person on a path to success.
Kavan Choksi / カヴァン・ チョクシ provides tips for achieving financial goals
The more specific one is with their goals, the higher the odds shall they have of achieving them. Being detailed and precise with goal setting makes it easier to create a clear plan of action. For instance, rather than having just “saving for retirement” as a goal, one should try to have a more precise objective, like “maxing out contributions to 401(k) and Roth IRA by the end of the year”. Basically, one’s financial goals must have specific targets and a deadline attached to them.
After one has identified their financial goals, it would be a good idea to document them. Documenting financial goals encourages a person to think about the specifics, and makes the goals actionable and clear, rather than vague. Seeing the financial goals written down can also serve as a reminder of one’s commitment and boost their motivation, particularly during challenging times.
Subsequent to documenting specific, realistic financial goals, one must create a plan of action to achieve the goals. There are many factors to consider when creating this financial strategy, including:
- How to save: In addition to determining the total sum of money one needs to save, they must also identify how exactly they would save the required amount. One can, for instance, implement a systematic savings plan to incrementally reach the financial targets. Alternatively, it would also be smart to redirect irregular income infusions from a commission or bonus to reach the goal.
- Where to save: One should consider the type of investment vehicle appropriate for their goal, based on the time horizon involved and their risk tolerance. For people requiring liquidity, a high-interest savings account would be a smart choice. On the other hand, for individuals prioritizing growth, an investment account can be a better fit.
- Tax implications: Certain savings and investment accounts are also granted special tax advantages by the IRS. Hence, it is important to weigh their pros and cons before making any decision.
As Kavan Choksi / カヴァン・ チョクシ mentions, the concept of “set it and forget it” can be effectively applied to achieving financial goals through automatic money transfers. By automating savings, investments, or debt payments, individuals can make consistent progress without the need for manual effort. Such an approach not only simplifies money management but also reduces the temptation to spend earmarked funds, making it easier to stay disciplined and focused on long-term financial objectives.
