Creating financial goals around your lifestyle and successful financial success does not happen by chance. Financial success is a process that starts with setting a goal and planning well. It also requires being confident in your ability to make the right decisions at the right times. It’s easy to forget the fundamental principles of finance. These principles are timeless regardless of your age and circumstances. These same principles should be applied to your financial affairs.

It’s the best time of year to get professional financial advice. This will help you and your family secure their future for many years to come. We can provide advice on major lifestyle changes, such as helping you prepare for retirement, investing to beat inflation, or helping you buy your first home.

Life goals

Writing down your financial goals and life goals is an important part of this process. This can help you stay focused in the face of setbacks, distractions and challenges. Write down a goal like “I want to be debt-free by 50” or “I want to retire at 55.” Each goal then becomes a milestone in your financial journey. This will allow you to see if you are on the right track without worrying about how long it takes to get there.

Choose timely milestones

Effective money habits, a lifestyle that you can afford, and thinking about your family priorities are key factors in ensuring your money serves you well throughout your entire life.

No matter what stage you’re at, the new year is a chance to review your spending, saving and investing habits and align them with what truly matters. You should also ensure your financial life is organized, so you feel in charge.

Creating clear financial goals

Without a clear goal, any goal, financial or otherwise, is just wishful thinking. This is especially true for creating financial goals.

You need to know why you do what you are doing. You could plan for your children’s future, your retirement, your dream vacation, or buying a new home. Once you have established your objective, it is important to assign a dollar value and a timeframe to reach it.

It is important to write down all your goals, no matter how small, that you see in the future, and assign a value.

Be realistic

Setting goals alone won’t guarantee success. It is just one part of the process that can lead to success. It is crucial to set goals, keep motivated, and evaluate your success.

Set realistic goals

It is important when creating financial goals to make sure they are realistic. While it’s great to be optimistic, being overly optimistic can be detrimental.

It is a good idea to be realistic about your financial goals, but it can also impact your chances of reaching them. Realistic goals are those that you can achieve given your current mindset, motivation, time frame, skills, and abilities.

Realistic goals will help you to identify what you want, but also what you can accomplish. They will keep you on track and motivate you all the way to your dream destination.

Divide goals into smaller targets

You need to start planning for where you want it to be. This will determine how much money you can save and invest to reach your goals. Each financial goal is different, so it’s important to break down your goals into shorter, medium, and longer term time frames.

A rule of thumb is that any financial goal you would like to reach within 5 years should be considered short-term. Medium-term goals typically have a 5-10  year time horizon. Goals that last more than 10  years are considered long-term. This will allow you to choose the best savings and investment strategy for your goals.

This includes assessing what major purchases you plan to make (e.g., buying property or renovating your house), as well as evaluating the future stages of your life, and how you will retire. It is important to consider inflation. It must be taken into account when you assign a monetary value or goal to a future financial goal. 

Knowing the inflation rate is important when saving or investing. It will affect how much you can make in real terms (after inflation). The ‘Rule of 72’ can be used to calculate, at a given inflation rate, how long it will take your money to purchase half of what it can buy today.

The Rule of 72 is a finance method that quickly estimates the time it will take to double or halve compound interest or inflation. Divide 72 by the number of years to calculate the interest rate that you would need to earn to double your money in that period.

Risk protection is paramount

Protecting your finances before you invest is important. Protecting your loved ones financially should be your top priority, without having to worry about investment uncertainty.

Talk about your goals with the people closest to you, and create plans together so you can align them.

A review of your assets, liabilities and incomes will give you a good starting point. This will allow you to clearly see where you stand and help identify areas that need improvement. This strategy will protect you and your family against unexpected events. Risk protection is crucial to any financial plan.

You should also ensure that you have a Will in place to protect your family. It’s important to think about how your family would cope without your income in the event of your death or illness, although not nice to think about, we must be realistic. 

Explore tax liability

Tax rules are constantly changing, so it is important to review your tax affairs regularly and plan accordingly. Tax planning affects all aspects of your financial affairs. There are many things you should be concerned about, such as the effect of rising property values on gifts and inheritance tax, the best way to dispose of shares in a company, and how to transfer your estate.

Utilising tax allowances or reliefs can help reduce your tax liability, and make significant savings over the course of your life.

Taxes are a certainty in most countries. You’ll pay more than you need unless you plan ahead. 

Taking control of your wealth 

A comprehensive financial plan will allow us to manage our money, evaluate our financial situation, and set goals. We can then create our strategy to reach those goals.

You can live comfortably and more confidently if you have a better understanding of your finances and set goals. This will allow you to get a clear picture of your current financial situation and help you set goals for your long-term and short-term financial future.

Creating financial goals will make it easier to make decisions and keep you on track to reach these goals. 

Set retirement goals

Setting retirement plans allows you to calculate the rate at which you will earn on your investments, what risk you should take, and how much income your portfolio can afford.

With the introduction of pension freedoms, the number of options for retirement has increased. You can choose to take your benefits in various ways, including buying an annuity, tax-free cash, or drawing income from your savings instead of your pension fund.

You have the best chance to start your retirement planning goals early, so you can ensure you have enough funds to support your lifestyle.

Remember, life is unpredictable

It is not a good idea to set goals and then never reach them. As life changes, you should expect to make adjustments. These changes can ensure you’re on track towards your goals, and set up a formal annual review. This will give you more confidence and certainty in your financial decisions.

We’ll help you monitor your plan and make adjustments as your circumstances, goals, or time frames change. It is a great idea to discuss your financial and lifestyle goals. We can offer an objective third-party perspective, as well as the expertise necessary to assist you with creating financial goals

Finally, be SMART. To ensure your financial and lifestyle goals are clear, achievable and realistic, each should be: Specific (simple and sensible, significant); Measurable (meaningful, motivating); Relevant (reasonable and realistic, resourced, results-based); Time bound; (time based, time/cost restricted, timely, sensitive).

Confused about your future? 

After we have analysed your needs, we can help you with creating financial goals and lifestyle plans that will serve you well throughout your life.

We can only make a positive difference in your life by understanding and meeting your specific needs. We offer a wide range of services and can tailor solutions to your needs. For more information or to arrange a meeting with a GSB Capital Partner, please contact us.