My Road to Financial Independence

Like any journey, you can get to where you want, if you know your destination, else you would be wandering aimlessly.  Similarly, the road to financial independence also needs a destination.

Research has shown that goals help drive success in various areas of life, and the same is true for your financial future.  Many of my friends put aside money - saving (and investing) but for no specific reasons, as a result, they keep dipping into their savings time and again, as when the need (like paying school fees) or for a want arises (like buying the new iPhone). This is why most of them are not in control of their finances. 

Financial goal setting and management can be very boring, but it is worth the effort. Once I set my goals, the goals will keep me focused on my financial plan. Figuring out what my objectives are and then matching them with the timeframe I have was the key part of my financial goal setting. You can also create the list of your financial goals on your own or you can work with a financial planner who has experience in this area. The most important part of financial goal setting is writing them. Writing made me accountable to my goals, it is no longer just a thought but a commitment. While writing my goals, I made sure that they are SMART Goals:

• Specific: made sure that my goals are not ambiguous. I was specific and I clearly wrote down what was exactly required

• Measurable: All my goals are goals quantified. It is an absolutely necessity.

• Attainable: I ensured that I set myself realistic goals. Highest level of motivation is achieved when goals are both challenging and realistic

• Relevant:  All my goals that matter most to me.

• Time-Based: All my goals are set with a defined time frame.

An example of one of my SMART goal is "by April 2030, I want to have saved Rupees 85 Lakhs to pay for my daughter's  MBA education in Indian Institute of Management." Once I have written my SMART goals, the next step was to prioritise each of these goals in the order of importance, and then determine how long I have to save for each of them.  I then categorize them into three buckets:

1. Short Term  Goals: These are goals that I want to achieve in the next 1- 3 years.

2. Medium-Term Goals: These goals are the ones that I will look to achieve in the next 3 - 10 years.

3. Long Term Goals:  These goals are the ones that are more than 10 years ahead like kids higher education, marriage etc. 

Regardless of what age you are in, setting personal financial goals is important for both your short term as well as long term financial health.  Financial goals are like road maps, it will help you make the right moves to reach your financial milestones.