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Prioritising goals

Investing money in different avenues can be a good way to earn higher returns in the future. By now, we know that investing is a good habit. But investing towards specific goals is a better habit. This way, you can concentrate on achieving real financial goals in your life within a certain time period.

But what if you have too many goals? How do you achieve all of them?

Let’s take Abhinav’s example. Abhinav has been working in an IT company for the past one year. He has just started investing his money. Right now, he has multiple financial goals for the near future. Here is his list of goals:

Abhinav earns around Rs 45,000 per month. With his income, it is not possible to meet all his goals at the same time.

Instead, it is always better to prioritize goals. In other words, some goals are more important than the others (at least for the short-term). By identifying the most crucial goals, it becomes easier to achieve all the goals at the right time.

1) Create a list
The first step is to create a list of all the financial goals you have. This exercise helps you understand what you would like to achieve in the next six months, two years or even ten years. Remember to be as specific as possible when writing down the goals. This will help you arrive at a clear financial estimate for the goal.

2) Rank them in order of importance and urgency
Once you have identified your goals, it is a good idea to rank them in order of importance. For instance, Abhinav may want to buy a sports car. But is the goal really that important currently?

Paying off the college debt may perhaps be the most important financial goal at the moment. It is always better to clear off existing debts. There is no point in chasing lower investment returns (6-8%) when debt (20%) is much higher. It might be better to postpone a less important goal for a later date when the financial conditions get better.

3) Invest to achieve these goals
After identifying the short-, medium- and long-term goals, Abhinav can start investing to achieve them. For instance, creating a retirement fund is an important long-term goal that should not be ignored. Abhinav can start investing small amounts regularly in an equity fund through a Systematic Investment Plan (SIP) for this goal. Similarly, he can divide up his funds to invest in different avenues based on his requirements.

4) Reassess the list after a few years
Once he achieves a goal, he can tick it off the list. Every small progress is important. However, it is necessary to review the list once in a while. As people grow older, their goals and ambitions change. As a result, Abhinav needs to adjust his goals whenever necessary and invest accordingly.

Goals are an important aspect of human life. But not all goals are equal. As a result, it is necessary to prioritize them and work actively towards achieving them at the right time in life. This way, it is possible to lead a happy and fulfilled life (at least where the finances are concerned).

What next?
Most people have the habit of saving money. This is certainly a good thing. But guess what? In the current day, saving money is not enough. You need to do much more in order to beat inflation and achieve your goals.


Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.