Financial goals maybe arranged into three categories.
(a) Goals based on a one-time expense. Classic example is a marriage. You invest to create a corpus, which evaporates around the time of the wedding. Any event that is unlikely to occur again or occurs infrequently would fall in this category. For example, a child’s under-graduate and post-graduate education expenses, a business goal etc.
(b) Goals based on recurring expenses or any event that occurs with a well-established regularity. These could range from
- a holiday that you like to take every couple of years
- an expensive medical test that needs to be repeated often
- school/colleges fees
- insurance premium etc.
Among these, you may realise that
- there are goals that are subject to inflationary increase each year (holidays, medical tests)
- there are goals that are subject to inflation, but only change (often by a large amount) every few years. School or college fees is a good example of such goals.
- there are goals that do not depend on inflation, for example, term insurance premium.
Of course, there may be other factors that affect the expenses involved but those depend on circumstances and hence cannot be quantified.
(c) Retirement! In both the above categories, the corpus save is utilised in full when the need arises.
Retirement is a very different ball game. A retirement corpus must be capable of meeting the retiree’s expenses for each year in retirement. That is the expenses drawn from the corpus must match inflationary increase. In order to do this the corpus must also be invested suitably. You can learn more about this here: How retirement calculators work
There are many resources available for goal-based investing at freefincal.
One-time financial goals may be planned with these goal planners
- Another version of the goal planner is also available with this versatile SIP calculator
- Beginners may benefit from: A Step-By-Step Guide to Long Term Goal-Based Investing
- Advanced articles on goal-based investing are found here: Goal based Investing: 4-part series
- A variety of retirement calculators are listed here: Retirement calculators at freefincal
I would like to add a recurring financial goals calculator to this collection.
- You can use this for goals that repeat with any frequency: once a year, once in 2/3/4/5 … years.
- Two recurring goals can be calculated.
- The results are tabulated in a single cash flow chart.
Comments and suggestions for improvement, welcome.
- Integrated template for creating your own financial plan. This will combine all the three types of financial goals
- Automated mutual fund portfolio tracker
Connect with us on social media
- Twitter @freefincal
- Subscribe to our Youtube Videos
- Posts feed via: Feedburner
- We are also on Google PlusandPinterest
Do check out my books
Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantMy second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a youngearner
The ultimate guide to travel by Pranav SuryaThis is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for ₹199 (instant download)
Free Apps for your Android PhoneAll calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)