Financial Planning: Setting 2016 Financial Goals

Setting 2016 Financial Goals

As the 2015 year draws to a close its time to review our 2015 financial goals and plans.

So what were your financial plan set out in 2015, Did you achieve it?

1. Take out your budget, review it, did you maintain a surplus budget during the year? What months? Why did you have a surplus? Did your income go up or down…..(same questions if your budget is a deficit)

2. Look up your 2015 net worth, have your become richer? What made you richer? More assets or less liabilities or both?

3. How is your debt picture in 2015? In numerical terms has your debt gone up or down? In terms of cost of the debt, are you still maintaining high cost debt on your balance sheet?

4. Review your 2015 retirement plan…is your pension contribution enough to fund at least 50% of your expenses during retirement? Have you calculated this?

5. What target saving plans did you have in 2015? Did you set up an Emergency Fund, or an educational Fund?

6. What about your investments in passive income generating assets? Is your portfolio making inflation adjusted returns?

7. Finally review your Estate Plan, have your protected and organized your assets to ensure your dependents remain in control of your assets, have you protected your assets and income by buying life insurance? Do you have a will?

Its important you make some quite time, and privately answer these question. Your answers will determine your 2016 financial plans.

In 2016, its very important you start of on a well-planned financial slate, with the knowledge you have gained from these financial planning series….

So from today, we should work on a most important part of our 2016 financial plan, which is to agree a 2016 financial goals. Let me remind us the Financial Choices flow we should take based on importance.

A. The first goal is to protect our income generation ability, by Life insurance, by organizing our assets and liabilities in a tidy, legal way.

B. Next is to pay down any expensive debt.

C. Next is to set up an emergency fund to cover 3-6 months of our Non-Discretionary expenses

D. Next is to start to invest any surplus from our cash flow into income yielding assets

It’s important, we follow this flow, don’t start to invest if you have no Emergency fund set aside.

What about our financial goals? Which goals have you set for yourselves in 2016?

A financial goal is a statement of financial intent, with figures to make it measurable, and a date to endure we have a target. I list sample financial goals below.

Goal 1: I plan to reduce my interest bearing debt from Nxxx to Nxxx by July 2016 or

Goal 2: I plan to set up an Emergency Fund of one month non-discretionary expense by March 2016, and to cover 6 months of non-discretionary expenses by November 2016.

Goal 3: I plan to build another source of Passive Income that covers 20% of my Discretionary Expenses by July 2016

Goal 4: I intend to increase my retirement saving by 10% starting by March 2016

Goal 5: to reduce my Discretionary consumption by 10% and channel saving to my investment account by July 2016

So do this Look at the Financial Choices, then build your financial goals….pick an goal, put a target and a date. Its very important you do this, remember if you don’t plan to succeed, then you cant succeed

If you have any questions on goal setting, do send me a message…regards