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Personal Financial Management and Life Goals

Personal Financial Management and Life Goals


Personal goals and objectives in one’s life differ from one person to another. Therefore, this means everyone has divergent aims and purposes in their life (Koh, 2012). Achieving the goals set by an individual is determined by how effective the strategies will enable them to attain the established objectives. Managing life well always presupposes well-being since the person will be able to reach his or her set targets.

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Among other things, financial planning is a very critical aspect of life planning. It provides for the achievement of various goals hence making people live in the best possible way. The paper will examine retirement plans that one may develop to get retirement benefits in the future stating their respective benefits, as well as disadvantages. Thus, an efficient retirement plan supported by an investment plan, in particular estate planning, is essential for the assurance of a life of ease after retirement.


People tend to invest their finances in various business opportunities in the market. Hence, their investments provide for earning income and improve their financial performance. Business investment has proved to be one of the most effective ways to ensure financial stability and freedom in society (Koh, 2012). Consequently, this has resulted in many people investing in numerous business opportunities in the economy in a bid to promote financial solvency and independence. However, businesses are hazardous as sometimes they may collapse leading to economic losses. The latter significantly affects the planning of one’s finances, which makes individuals return to their drawing board and devise a more efficient plan to achieve success with their investments.

In society, adolescents are always known to be risk-averse since they can invest in very risky business opportunities. Besides, they are at the early stages of planning their lives; therefore, a variety of options will ensure that juveniles make the best choice, which would lead to the attainment of the set objectives (Lusardi & Mitchell, 2011). As a young person, therefore, I would make these considerations to make certain that I reach my targets in life.

Goals assist most individuals in achieving success in almost all areas of their lives, such as careers and health. Regarding people’s financial future, aims tend to become non-negotiable. My objective is to have a peaceful, healthy, and stress-free life after retirement. Nevertheless, it is achievable if and only if I invest and save prudently. Like any other person in society, I would manage my finances effectively, as well as improve them to secure the elimination of possible financial challenges and thus I will be able to obtain the desired result.

Long-term financial planning becomes difficult during adolescence because the purpose for which one makes savings is so distant in the future that it is almost an academic concept. Consequently, this causes most people to neglect their retirement planning and capital since they believe their goals are so remote, that they seem unrealistic (Knoll & Houts, 2012). I am no exception and with my very bad financial status, it becomes necessary to devise ways through which financial goals can be kept realistic so that I could also improve my financial strength. As such, I follow the modern SMART system, which assists me in setting my objectives. The acronym covers the characteristics of every aim. The latter should be:

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· Specific –goals should not be general or concern a collection of thoughts. They should remain unambiguous, and accurate and state what should be done exactly.

· Measurable – all goals should have a way through which the process of achieving the goals can be quantified.

· Achievable – goals should remain within the scope of the individual’s ability. Setting ultimate goals is not recommended.

· Relevant – goals should bear relevance to the person and should have a positive impact on the outcomes.

· Time-bound – goals should be subject to time, to reach them within a certain timeframe.

The outlined system of establishing goals applies to all kinds of objectives. Being SMART, therefore, is critical to meeting financial targets.

Short-term goals are essential for the attainment of long-term ones. The former act as a guide in advancing toward a financially suitable future. Reviewing the progress of each achieved goal provides adequate knowledge of the position of the individual in fulfilling a defined plan.

Subdividing goals into attainable objectives enables one to plan just far enough into the future. To reduce the ambiguity of time, splitting the long-term goal into several short-term ones reduces the complication of attaining the primary goal. Therefore, the preparation and breakdown of targets are significant, and any person should seek professional advice to draft the available plans.

Finally, it is necessary for adolescents, who have just started to plan their future, to remain open to change, and to be able to adapt to these adjustments, without adversely affecting their long-term goals. Life-changing decisions such as marriage can alter plans to a considerable extent. Thus, it becomes required to create the objectives that both partners can work towards, and set the financial setback that each spouse will agree to incur to realize these aims. Intersections on the way to future financial freedom will make the individual develop the course of actions through which he/she could change their goals and remain on track.

Retirement plan and Estate Planning

Retirement always seems so remote, but it is never too early to start preparing for it. Planning assists in handling changes that may occur in life and helps an individual to attain some level of control over their future. For instance, to earn one million US dollars until the early retirement age of 65, saving at least 127 US dollars a month from a young age of 25 will contribute to achieving this goal (Brown, 2007). Therefore, devising efficient financial plans provides for the attainment of one’s own personal life objectives.

One of the best considerations I would make is preparing a retirement plan. Pension schemes ensure sufficient income at an old age (Brown, 2009). Retirement plans encourage people to make savings in their young days and get benefits late in life. Hence, this secures the minimized risks of financial losses in the future. Additionally, it enables one to lead a very comfortable life even when they retire from their jobs. Different retirement schemes have divergent retirement plans. Besides, there are retirement plans that give their clients all their savings once they reach certain age while others provide income to their customers continuously after they retire.

People are always obligated to draft good personal plans for their life because this guarantees that they do not suffer in their future days as a result of financial problems. Retirement plans with continuous income flow are the most important since they always ensure the constant movement of revenue after a person retires. Therefore, I would pay meticulous attention to such a retirement plan. The benefits are passed on to the next of kin in the unlikely event that the first heir dies. Thus, those people are often referred to as beneficiaries.

Human beings are living creatures, and like any other living thing, they die at one point in their lives and cease to exist. However, this does not mean that when they meet their end everything comes to a standstill, as they usually leave behind other family members who depended on their income. While making considerations in planning my life and financial plans, I would account for a retirement benefit plan that will continue supporting my family in case of my demise. Death is a natural occurrence that cannot be prevented in society and everyone faces such challenges in their life. Consequently, this will be conducive to prospective financial stability.

The concept of estate incorporates all kinds of belongings of an individual. An estate plan provides adequate directives as to what happens to one’s property upon their unfortunate demise. The issue of the estate should be managed early in life to avoid instances where as a result of accidents, a person is rendered unable to prepare such a document, which leaves the state with the authority to make this record. I would make investments in the real estate business to ensure adequate cash flow for the family. Moreover, this will secure my financial stability in my old age; hence, financial constraints will be prevented in the long run. Despite being very risky, business enterprises are one of the surest ways of promoting financial stability; therefore, by investing in a commercial venture, I will provide a sound financial backup plan for my future days, from which my family may also benefit.

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The estate plan begins with a will that includes the instructions as to what will happen to all the assets that an individual owns. Planning the estate will enable one to establish records, official titles, and beneficiary descriptions as well as to avoid conflict (Fellows, Simon, Snapp, & Snapp, 1976). Reviewing assets regularly can assist in implementing changes to stay on track with the set goals. Each asset will contribute to one’s retirement income. For instance, a house can be a valuable asset, but a high mortgage payment can affect the ability to save an adequate amount of money for retirement. Therefore, moving to a smaller house will reduce the payment amounts and increase pension funding.

Contingency Plan

Human beings are prone to making mistakes; hence, contingency plans play a crucial role in wealthy and secure life. Thus, this entails planning on the alternatives that can be taken in case of any failures in the established programs. Furthermore, effective planning seeks to ensure the failure of plan A does not influence a person adversely. Additionally, this significantly contributes to a successful life in society since there will always be backups for the individuals in the community.

Contingency plans are critical, as they offer a backup plan in case the original one fails. As such, I would take various insurance covers to act as a backup to the retirement plan. Insurance cover is an arrangement between the insurer and the insured whereby the latter pays a certain specified amount of money to the former for the insured to get protection against inevitable occurrences in their lives. Some infelicitous occasions that happened to the insured would lead to the compensation paid by the insurer.

Moreover, there is a variety of insurance covers that can be chosen by a person to enhance the quality of life. For these reasons, I would decide on the life assurance cover to ensure I get benefits after reaching a particular age. Therefore, this will act as an alternative to the retirement plan in case of its failure, and I will still receive some income after retirement. My family will also not suffer in case of my early death since they will be entitled to some earnings under the life assurance cover (Lusardi & Mitchell, 2011). Insurance covers secure that the insured parties remain financially stable.


In conclusion, efficient retirement plans and discipline alongside investment plans such as estate planning are necessary if one wants to achieve their objectives and live a comfortable life after retirement. Life is always unpredictable; hence, no matter how good the plans may seem at first, one should always have backup plans to attain the established goals even when the initial plans have failed. Thus, this ensures that the plans run normally. The most common backup plan for a retirement plan is investing in business enterprises and getting insurance covers.

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