Monday, August 26

Setting your financial goals


In a football game, the objective of the players is to get the ball into the opposing team’s net. They make move after move, adopt one strategy after another, all to bring the ball forward and into the goal.

Now could you imagine playing football with no objective? All your favourite players will simply run around this huge green field with a ball, not going anywhere, not achieving anything, but worst of all- not scoring any GOAL!

There is no football game without an objective.

Just like football, you also need to have objectives or goals in your life. Goals help give you direction, as they guide you towards achieving the life that you want. Without goals you may wake up one day just to realise that the best of your years has gone by and you have yet to achieve anything.

Aside from being an essential aspect of daily life, it is important to note that money is a vital tool to help you work towards your goals in life. Y you need to manage your money through financial planning. One of the steps in this process is to set your financial goals.

How to set your financial goals?

Your financial goals will help you determine where your money will come from and where it will go.

When setting your financial goals, pay attention to what you value and believe in life. Without knowing what is important to you personally, it will be difficult to set satisfying financial goals. When you understand what your values and beliefs are, you will find it easier to set financial goals that you can achieve.

Write down your financial goals. Just having these goals in your thoughts are not enough. You are very likely to forget the goals that you have set or you may even have unconsciously changed them in your mind. Writing down financial goals will increase your chances of achieving them.

When writing down your financial goals, be as specific as possible. What is the point of writing: “My goal is to have lots of money in the bank”. What do you mean by “lots of money”? Is it RM50,000 or RM500,000 or RM5,000,000?

Be specific and write your goals in terms that can be measured. Break down your goals into those that are short term (less than one year), medium term (one to three years) and long term (more than three years).

An important goal – saving for emergencies

What would happen if you suddenly could not afford to pay for your education? Would you sacrifice your goal of attaining a degree or would you have a back-up emergency plan?

In life, there are many uncertainties you might face. Unexpected events, which may be disastrous and unfortunate in nature, can happen to you or members of your family.

In most situations, money would be needed. It is extremely important that you are always prepared with the right tools and knowledge for situations that require you to think on your feet and deal with problems you might not be used to otherwise. An emergency fund is one such tool that you can use.

When you list your financial goals, include savings for an emergency fund. As a general guideline, have an equivalent of at least six months’ worth of your basic living expenses in your emergency fund. It is desirable to put aside about 12 months’ worth.

It might be hard at first when you start working to have that kind of money kept aside, but make sure you build it over time.

Every little amount will help build your emergency fund. Remember to make a conscious effort to save.

The Credit Counselling and Debt Management Agency (AKPK) is an agency under Bank Negara Malaysia tasked to help individuals take control of their financial situation. For assistance, please contact AKPK’s Power Infoline at 03-26167766 or visit