Despite their obvious utility, setting financial goals, is not always easy to do. What happens when we do not articulate goals is that we are tempted to simply save what we can without an understanding of how it serves us.

Alternatively, you simply follow goals set by a peer thinking that they are going to be similar to what you might come up with anyway.

Neither of the two outcomes will be beneficial to you because ultimately your goals are what you seek from life and falling short will not feel good, neither can using someone else’s benchmark work for your unique circumstances.

Start with one financial goal at a time

The first step really is saving as much as you can, with the awareness that your current income needs to work for your future as well. After that, clarifying your financial goals requires three things: value, time frame and priority.

Put down a goal value

Goal value is nothing but a monetary tag or a price tag on your goal. For example, one of your financial goals might be to buy a house. What is the value of that goal? It need not be a precise amount as this can change with time. However, an approximate value of a house you envision today is achievable.

This value is the minimum you need to have in order to achieve your goal.

Arriving at a financial goal value begins with visualizing your goal so that you have the closest approximation of what you want in future. Let’s say that the kind of house you seek is worth Rs 4 cr today. Is this enough information to begin investing towards this goal?

Put down a time frame for your financial goal

Let’s dig deeper. If you now visualize when you would like to own that house, you can start to approximate a more accurate future cost of the goal. Let’s assume that this time frame is five years from now.

Five years later the price of this house after considering an average price rise of roughly 7.5% a year in real estate prices (of that area) will be around Rs 5.75 cr. This is now a more relevant goal value that you need to work towards.

It may very well be that the house you end up buying is neither in that location and nor does it cost as much, but you are prepared and moving in the right direction.

Put down your priority

The last part of this is to rate your goal on a priority scale from 1 to 10, 1 being least priority and 10 being highest. Let’s say that along with building your ideal house in five years, you have also decided to go for bi-annual vacations with your entire family to a new overseas destination each time.

Back of the envelope calculations will tell you that this goal can cost anywhere between Rs 10- 15 lakhs for each trip; that’s Rs 20-30 lakhs a year and roughly Rs 1 – 1.5 cr in five years.

Now you have two goals for the next five years, saving for a house and for your bi-annual overseas vacations. There is a possibility that one eats into the other. Unless you prioritize, your outcome may not be achieved.

In all likelihood, the house goal will get a higher priority score of 8 or 9 as compared to vacations which might be at a 5 or 6. If at any point you are falling short of how much you need to save for both, you should ideally cut back on the lower priority goal spending.


Repeat this process for all your goals to have a neat pack of goals spread across a timeline and a priority line. This can then help you achieve what you want from life in a much more efficient and accurate manner.

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