Setting investment goals is very important to put your savings to productive use and constantly check your financial health. You should prioritize these goals and stay committed to them.
You can share your investment goals with your spouse or a family member who can support you and help you stay focused. You should also learn how to manage conflicting goals, so that they do not have an adverse impact on your finances.
Prioritize your goals
Prioritizing your goals is very important, as you would know where to allocate your money first. If you suffer a setback in your income, you would know which investments can wait and which investments should never be ignored, like your retirement fund, which will ensure comfort for you and your spouse in old age. Non-retirement goals, like setting up of an emergency fund for unforeseen accidents or illnesses, and buying a house are equally important.
Once you prioritize your goals, you should find out the mode of investments to fulfill them. For instance, equity investments should be made if you want to quickly grow your savings and are ready to take some risk. Similarly, to have a regular flow of income after your retirement, investments should be made in debt funds or tax deductible retirement plans.
Manage conflicting goals
You should also learn how you can manage conflicting goals. For example, you would have realized that it is very important to pay off your debts before retirement. But at the same time you would be looking at boosting your retirement fund or an emergency fund. How you deal with these conflicts depends on your particular situation and how urgent it is it accomplish a particular goal.
If you are getting close to your retirement and you still don’t have enough savings, then there is no doubt that you should boost your retirement fund even if you have to carry the debt burden for a longer period. On the other hand, if you are facing foreclosure and your retirement is still far away then you should focus on saving your house first. As long as you are flexible enough to adapt to changes in your financial situation, it wouldn’t be difficult to manage conflicting investment goals.
Track your progress
Creating your goals is not enough and you have to constantly keep track of how you are progressing. Without doing this, you would soon lose motivation and would conveniently forget your target.