Assuming you went through the goal setting process correctly, you will have a list of goals to be met and time span you want to achieve them. If you have not yet set your financial goals, read this previous article to learn the factors to consider when setting your goals. You can also speak to an Axis Advisor to support in your goal planning process.
If you have set your goals, then it is important to know that there are several strategies one can adopt to ensure those objectives are achieved. One can choose to:
I. Establish additional income streams
II. Cut costs - spend less than you earn.
III. Pursue a mixed strategy - A combination of cost cutting and multiple income streams.
It is just like decisions company managers make when faced with choices to meeting a set return on equity. The company either will seek to sell more of its products or pursue cost efficiency. You should see your life as the company and you as the board chairman of your company to be able to make important strategy decisions. Ensure the strategy you choose is relevant to your goals and circumstances. Do not pursue drastic cost cutting to increase your savings when you know your spouse will get angry or saving and investing all your money when your children are sacked from school.
So, decide how you are going to generate the savings to put in an investment in order to meet your financial goals. Whether to do something else to earn extra money on the side or to reduce your expenses is up to one to decide. The financial gurus place emphasis on the fact that one should not embark on a savings or pursuing a financial goal just because someone says it is worth embarking upon. Your first objective is to pay down your debt if you have one. Debts come in the form of unpaid student loans, car loan, credit card, mortgages etc. Debt left unpaid quickly compounds and will crush you. More information on compound interest will be shared in a subsequent article.
Your next most important step is to save towards an emergency fund. Financial planning experts say you should have enough savings up to 6 months of your salary. If you lose your job or source of income for any reason, you should be able to depend on the emergency funds until you are able to re-establish an inflow of income. I will advise that you start now and prioritize this financial objective. The COVID-19 pandemic has taught the important lesson of having some savings to cushion you and your dependents during an extended lockdown situation we are facing.
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Axis Pension Trust partners workers throughout their retirement planning journey to ensure they are on track to achieve a dignified retirement. For more information on our services or general enquiries, send an email to This email address is being protected from spambots. You need JavaScript enabled to view it. or call 030 273 8555.
