9 Things To Take Note Of When Setting Personal Finance Goals

Ever wonder how the money you received from your recent personal loan has dwindled? And how have you been spending your hard-earned money? Setting short-term and long-term goals is the first step towards financial independence.

When you have no personal finance goals, you will likely develop poor spending habits and may even end up in debt. Short-term financial goals act as a stepping stone to help you achieve bigger goals by providing you with information and foundational knowledge to set long-term goals. So, how should you begin? Here are 9 things to get you started.

1. Goals should be specific

Rather than setting personal finance goals such as “I want to save money”, you should have goals such as “I want to save $10,000 by December.” Specificity prompts you to take the necessary steps in achieving those goals. For instance, if you want to renovate your kitchen by the end of July, you can consider taking a personal loan in Singapore of a specific amount to finance that goal. By knowing that your goal is to repair your kitchen, you’ll have a clear budget that dictates how much money you need for materials and labour.

2. Ensure your goals are measurable

“I want to pay off my loan this year.” This is not the right way to set goals. Instead, your goal should read, “I want to pay off 50% of my loan this year.” A measurable personal finance goal helps you set the specific amount to contribute towards personal loan repayment each year. Setting measurable goals enables you to estimate the measurable amount of personal loans you need to finance your goals. When taking a personal loan in Singapore, ensure that it is fully utilised and research on banks and licensed money lenders’ interest rates that are the lowest and most affordable.

3. Goals need to be achievable

Sometimes it is easy to overestimate the results of your goals, which may lead to eventual failure of adherence and demotivation. Penning down your goals creates a commitment towards achieving them. You can always feel the satisfaction of ticking a goal off once you have achieved it – the feeling is unbeatable. Once you’ve written down your short-term and long-term goals, place them in a location where they will always be seen and remembered.

4. Set realistic goals

In view of setting achievable goals, you must also ensure those goals are realistic. You should be able to reach those goals based on your current mindset, skills, and motivation. If writing down your goals is too much of a habit to inculcate, try vocalising them instead. Sharing your goals with like-minded friends and family will provide you with viewpoints on how realistic they actually are and hold you accountable for achieving them. It’s also important to discuss your goals with a financial advisor who can offer tools and insights to help you manage money better. Finance experts can even help you manage your personal finance effectively and keep you out of debt.

5. Every goal should be time-sensitive

There is no day such as ‘someday’. Ensure you have a timeline for saving or paying off that personal loan and aim at achieving it. Personal finance goals are more realistic when there’s a deadline attached to them and it will always give you foresight towards financial freedom. Hence, no delays and accumulation of debts.

6. Avoid goal comparisons

It’s easy to look around and see your friends and colleagues building homes and saving for grand weddings. But, comparison is the thief of joy. Your goals may seem small compared to those around you, but they are personally yours. There is no reason to follow the crowd when setting goals. Put the blinders on and focus on yourself.

7. Establish a budget and stick to it

When you sit down and analyse your finances, you may be shocked at just how much money is slipping through the cracks without your noticing. A budget is exactly what is needed to help analyse your monthly expenses and income to ensure you are spending money wisely. When you spend soundly, you can set aside the money you don’t need to use towards goals you have set. For personal loans, having a budget will help you determine a comfortable amount to borrow. As a result, you’ll find yourself actively seeking the lowest personal loan interest rates, which will save you tons of cash.

8. Keep a positive mindset

As long as you’re doing your best to achieve your set goals, maintain a positive mindset. Whether your goal is to pay off a huge personal loan or to cap personal loan interest rates by making regular payments, keep your eye on the prize. Remember, it’s normal to get discouraged along the way due to emergencies that may veer you off track. In such cases, take a look at how far you have come and keep a positive outlook and remember your goals are in sight and definitely achievable.

9. Track your progress

You can’t get to your final destination successfully if you are unsure of where you are. Seeing how far you’ve come and how close you are to your goal can motivate you to keep going. You can keep track of your goals using a journal or using apps if you prefer using technology. Ensure you have records of all your goals and what you have been able to achieve. For instance, if you’re seeking a personal loan in Singapore, you should be tracking your credit score. As your credit score improves, you’ll be at a better chance of getting a low-interest personal loan.

Now that you have these tips under your belt, it’s time to get your financial health in check. As always, contact us if you are looking for personal loan options!