It’s that time of year again to set your intentions for the next 12 months. And that not only includes your physical and emotional health, but your financial wellbeing too. Before the calendar turns, take time to reflect on what you want to achieve in this new year, and how you plan to do it.
Look back to look forward
So much has happened in 2021. While you might have had an idea of how this year would go, things are likely different from what you imagined — and not just because of the global pandemic. Maybe you were expecting a raise that never came, or a move to a new location that was put on hold. If your circumstances have changed this year, it’s understandable that your financial goals are no longer the same.
So, take some time to look back at the past year and ask yourself:
- What changed for me this year in my personal and professional life?
- Did I save as much as I had originally intended at the beginning of the year?
- How did my investments perform over the past year?
- Were there any major life changes that affected my financial standing?
With so much occurring over the past few years, it’s likely that your financial situation has changed drastically as well. And anytime your financial situation changes, your goals should evolve along with it. This allows you to adapt your investment goals to your current reality.
For instance, if you were forced to use your emergency fund this year to pay for expenses, your new goal should be to replenish your emergency fund as soon as you can. Or, maybe you received a substantial raise that you weren’t expecting and can now set a higher savings goal for each paycheck.
You should also ensure to adapt your goals to make them as personal as possible. The more personal your goals are to your financial and life situation, the more driven you will be to reach them. This could mean setting goals based on how much money you make during the year, or based on what you want to do with your investment returns.
There are two types of goals: short-term and long-term. Both of these categories are important, but are vastly different. Short-term goals are focused on what’s going in the present and how your investments can help you make the best decisions in the near future. Obviously, not all short-term investing goals are created equal. For instance, your goal to buy a house this year is likely more significant to you than your goal to buy a new phone.
Alternatively, long-term goals help you prioritize what you want down the road. Most people’s long-term investment goals are centered around retirement and being able to retire by a certain age. However, your long-term goals could also include saving enough to send your kids to college or even to leave money to your grandchildren. Don’t be distracted by short-term fluctuations in price, but rather, focus on how an investment will fare over a multi-year period.
Time is a precious commodity that you can’t get back. And when it comes to investing, you could spend an infinite amount of time consulting with professionals, researching investment strategies, and monitoring the stock market. Or, you can invest using an online platform to relieve much of this headache.
However, choosing an online investment platform is no easy task. You must consider the company’s reputation, investment options available, and a number of other factors. Your own investment knowledge and time you are will to commit to investing, should be taken into account as well. Some platforms, like Bondora, offer automated investment strategies that require very little time or effort while providing solid returns.
Do your due diligence to determine which investment platform is best for you.
While you might have slacked off when investing in the past, you now have an opportunity to approach the new year with a better mindset. A new year brings new possibilities. Establishing your investing goals for 2022 now, will better prepare you for the best financial year possible.