Financial Goals you must obtain In Ghana before age-40
Life they say, begins at 40, but before you reach the said age 40, you should have put financial goals in better proportion before the fast approaching retirement age catches you. The financial goals of each individual is by default, divided into three. Age 20 which is a career age, age 40 which is an achievement age and age 60 is the retirement age. It’s however described as a penalty to begin life at 40 even though sometimes it can work with a strategic planning and assistance from a financial expert. It’s not advisable to Begin your financial goals and planning at age 40, it should be an achievement period. Below are financial goals you ought to achieve by age 40. Also read my post on money saving tips
1. Emergency savings fund
Before “age 40”, you should have an emergency savings fund at your preferred bank. An emergency savings fund are funds set apart for an unforseen contingency of life, so that in case of emergency you wouldn’t have to tap into other financial goals funds. You must plan to have an emergency savings fund for the purpose of unforseen contingencies. As you are aging, consider your health as well or anything in case of urgency.
2. Get a retirement savings
You should plan to have a retirement savings. Yes! Retirement savings should be your greatest achievement ever before age 40 and beyond. You should save enough having retirement in mind. Planning your financial goals with retirement savings means you are planning to be wealthy even after retirement. You should also review your retirement savings plan at age 40.
3. Develop debt management Skills
You shouldn’t surround your account with debt. Learn how to manage debt, you should be investing on relevant business not rather with debts. It’s the time you should say no to debt.
4. Invest your money
You should invest your money relevantly on profit making business instead of piling your savings in your account with no benefit. Investing in a profitable venture will give you a windfall benefits and thereby increasing your retirement funds.
5. Review your insurance cover
At age 40, you should be yearning to review your insurance cover which probably was made in your age 20’s (career age) and so by the time you reach age 40, your insurance cover should be reviewed to fit in with your current age.
6. Set financial goals
You should set financial goals for yourself. Setting financial goals means you outline targets and achievements at a given period of time and see to reaching your target. For instance, you want to save $50,000 in your emergency saving fund in 12 months time. With this example, it can show that you have a financial goal to achieve and it’s relevant as well at a stipulated period of time.
How To Set Financial Goals
Setting a financial goal as already explained above, to outline a target to achieve in a particular time. In setting a financial goal, there are certain important things to note while on it.
Specific: Your financial goal should be specific to execute. If it’s investment it should be, if savings it should be. It should specifically be written down.
Measurable: Your financial set goals should be measurable. Yes because you need to remember your target in order to apply action to achieve your set goals. It should be measurable in a considerable amount, say Ghs500,000.
Achievable: Your set goals should be achievable, it should be something you must work to achieve at all cost. For instance if your financial goal is to pay your rent in six months time, you can not afford to overlook your goal simply because you must pay your rent to avoid sudden evacuation.
Relevance: The set goals should be relevant in nature, it should be something of equal importance and must be obtained whether hook or crook. Paying your rent is very relevant and essential in nature.
Timely: Finally, Your set goals should be timely, which makes it a targets. Setting a financial goal to pay your rent in six months clearly shows how timely it is.
There are three types of financial goals you should consider. Short term financial goals, middle term financial goals and long term financial goals. All these three are self explanatory in nature. Short term financial goals are set to achieving a goal for an emergency situation or in matter of urgency in a Short period, for instance, if your goal is to save $1,000 in six months to settle your rent. Middle term goals are set to target a financial goal in a year or two. For instance, if your set goal is to save $100,000 dollars in your savings account in two years. Finally, long term goals are financial goals set to be achieved in a long period of time. These goals are normally comprehensive in nature. When you set a financial goal to build a house worth millions of dollars in ten years.
At the goal setting work, clearly write down the financial goals you need to achieve by age 40.Kindly list your goals in detailed steps, review the steps listed in details towards your goals and then set a budget funding on the goal you want to set.
The budget funding
A budget is a financial tool which helps us reach or obtain our financial goals. There are three types of budgeting. Planning budget, problem-solving budget and comprehensive budget. These are personal finance budgeting and it shows the purpose and target for your goals. Plan budgeting in personal finance is a budget plan for personal businesses. Problem solving budget is designed to solve personal finance based problems whiles the comprehensive budgeting will have to do with the budget of larger organizations. (We’ll learn about budget in my next post)
Working To Achieve
To be able to achieve your financial goals, you need to be realistic to your goals. Not swerving a goal you have actually set to achieve for other reasons. You should stick to your goals. Again, you should plan and write your goals down as said earlier. Also, goals are action plans, you need to take action. Every goal needs an action to be achieved. Another way to achieve your goal is to make it achievable. Your own goals should be achievable to you. Finally, you can break your goals into smaller and achievable at the stipulated time frame.