Achieving financial goals

Financial goals can be divided into the following categories:

• Short term (0-2 years), e.g. a new car, your next holiday
• Medium term (2-5 years), e.g. an extended overseas trip, deposit on a house
• Long term (5+ years), e.g. major home renovations, being able to retire by 50

 

It helps to write down what you want to achieve over each of these periods. By defining your goals you'll have a clearer direction, and can make savings and investment decisions with confidence.

Defining your goals

When defining your goals, be specific and spell things out. For example, "I want to save $100,000 for a mortgage deposit in three years time". Or, "I want to retire at 60 with an after-tax income of $50,000 a year which will last at least 25 years". It's important to set a specific deadline for each of your goals. This focuses your mind as well as your savings strategy. You will need to determine:

• Goals
• Amount you've already saved
• Amount you need to save
• By when

 

Once your goals are clear, the next step is to work out how much you need to save to reach them. This requires developing a budget.

 

Important information

• This is not advice, this provides general information only and does not take into account your individual financial circumstances or investment objectives. You should assess whether the information is appropriate for you and consider talking to a financial adviser before making an investment. Investment products are subject to investment risk including the loss of income and capital invested. Colonial First State Managed Investment Funds, FirstChoice Investments and FirstChoice Wholesale Investments are issued by Colonial First State Investments Limited ABN 98 002 348 352 AFSL 232468. Product Disclosure Statements (PDSs) describing the products are available by contacting Investor Services on 13 13 36. You should consider the relevant PDS before making a decision about the product. The responsible entity, Colonial First State Investments Limited receives fees.