Investment is a lifelong process and losing discipline at any point can dent your financial health. Leaving an investment midway or slacking on your payments could disrupt your savings plan. One way to stay committed to your investments is by staying motivated towards your short-, medium- and long-term financial goals. Here are some steps to keep you on track:
Prepare a budget
Once you create a budget, you know how much money you have, how much you need to spend, and how much you can save and invest. A budget helps you to see how your expenses add up so it’s easier to control spending beyond your means. Thus, it helps you save more, motivating you to set higher goals.
For better budgeting practices, start writing down your financial tasks. You can work towards achieving them one by one. This would help you to organize your finances effectively.
Set realistic financial goals
Your financial goals must not be higher than what you are capable of achieving. Being overly ambitious could lead to failure in meeting your goals. This would work as a demotivating factor to set further goals. Achieving a goal always works as a reward for leading a financially disciplined life, so make sure you are setting realistic goals for yourself. Make sure you give yourself the required time to build a fund.
For example, if you want to buy a house and you need to make a down payment of Rs. 5 lakh, saving for it in two or three months could be challenging. However, if you invest in an appropriate instrument for 12 to 18 months, your monthly saving amount requirement would be only Rs. 30,000.
Do not ignore small goals
Achieving smaller goals can boost your confidence and push you to achieve bigger goals. Sometimes you need to set short-term targets in order to fulfil a long-term goal. On failing to meet these short targets, you would find yourself facing difficulty in achieving bigger goals. For example, if you want to build a corpus of Rs. 1 crore in 20 years, then simply by investing Rs. 5,000 per month, you can get the desired amount (assuming ROI of 17% to 18% p.a.).
If you wait until you earn a big amount to invest as a lump sum, you may miss the benefit of compounding growth, and the Rs. 1 crore target would seem unachievable. So set small, achievable goals that add up gradually towards bigger ones.
Review your progress
You must revisit and review your goals and the way you achieved them. Recognizing your own achievements could work as a big motivating factor in setting future goals and achieving them. Reviewing your financial tasks would also help you to figure out whether you are going the right way or you need to make changes.
Use reminders and online tools
With various online tools available to keep track of expenses, investments, loans, etc., you can go paperless and review your financial activities through apps. You can also set reminders for paying Credit Card bills and EMIs etc. These apps can help you stay focused and committed to your investment plans.
While no one is completely protected from financial setbacks, motivation and discipline can take you a long way.
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