What is a financial goal and why do you need to have one
A student's guide to financial goals and planning! Learn how setting realistic financial goals can help you balance studies, social life, and passions while staying on top of your budget. From saving for a prom dress to building credit or creating an emergency fund, discover tips to achieve financial independence and bridge the gap between your current and desired lifestyle.
As students, do you ever get an overwhelming sense of dread. The looming fear that time is just ticking away and you haven’t used it to the best of your ability? With every outing you go on, the amount of money in your pocket keeps fading?
Worry not because in this article, you’ll be guided through a crash course on financial goals and goal-setting.
What exactly is a financial goal? A financial goal is a monetary objective you set for yourself and then try to achieve. A regular goal can include losing X amounts of weight or trying to gain muscle. However, a financial goal can include saving up money to buy a membership at the gym, or setting aside money to buy the dress that you want.
Why should we set financial goals? Constantly denying yourself that treat or dropping a dollar in your savings jar daily can frustrate you at times. In times like these, having a set financial goal gives you clarity about what exactly you’re working for.
It can also be hard to manage a social life, studies and our passions along with our daily budget. This is why it’s so essential to set realistic financial goals relevant to our cause. These targets keep us motivated in the long run and help keep our finances in order.
With the right financial goals and accurate financial planning, any student can be sure to attain financial independence.
Is there anything like the “best” financial goal? No, financial goals are volatile- subject to change. Similar to how our moods fluctuate throughout the day. They depend on a variety of circumstances that are unique to everybody. Just like you don’t always have the same music taste as your peers, in the same way financial goals di too. They depend on factors like family income, your current priorities and the time frame that you set for yourself.
To conclude, the “best” financial goal is the one that bridges the gap between your current lifestyle and your desired lifestyle.
Some solid financial goals for students include applying for financial aid, planning to pay off student loans sustainably and opening a savings account. Some more examples include - saving up money for a prom dress, creating an emergency fund, contributing to the household budget.
👉 For example - Let us say your goal is to build credit :
- The first step to building credit is to start getting and using a credit card.
- Choose a few items to pay for with your credit card.
- Make sure to pay off the balance each month.
👉 For example - Let us say your want to establish an emergency fund:
- An emergency fund can be started with just a few dollars but over time and with consistent saving, you will find that this money will compound.
- Useful for unexpected costs and emergencies
- Acts as an umbrella fund- a safety blanket for unexpected situations.