Financial goals are of two types – short-term and long-term goals. The short-term goals are the ones which are accomplished within a year or 2 years’ time frame. Long-term financial goals are the ones which are accomplished 5 to 10 years down the line. These long-term financial goals involve disciplined savings.
Most common long-term financial goals are – retirement, children’s education and getting rid of debts. To achieve these goals, one requires a lot of commitment like cutting down on current spending and saving for future. Saving enough is the first step in long-term financial goal.
There are a lot of ways you can save money, cut down spending on unnecessary things. Start listing your expenses and analyse them on a ‘week on week’ basis. This can help you evaluate where you have been spending & how much you can save.
The second step is to list down your goals and evaluate them. For example, you want to pay off the debt you have taken which stands at 10 lakh rupees in next 5 years. How will you go about it? How much can you overpay every year? List and write it down as this will help you achieve your goals in a timely manner.
The above example was to repay debt but most other long-term financial goals require you to invest money for the future to reap benefits of compounding. So, one needs to invest systematically to achieve these goals. Once you have invested, it’s essential to keep a track of your investments and evaluate them from time to time.
Few things one should consider –
- To reap the benefit of compounding one needs to start as early as possible.
- Be disciplined in your investments.
- Review your investments carefully at least twice a year.
- You can also consider hiring experts or choosing a financial product which offers these.
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