All of us have various goals to achieve in life for which we also save and invest. However, the two are seldom coupled. In fact, goals and investments may be running on two different tracks. There could be cases where the goal is short term but the investment instrument is long term or even vice-versa. The solution is to map respective goals with investments. Here are 5 simple ways to do this.

1. Make a budget

Which is more prudent – save what is left after spending or spend what is left after saving? The latter of course! This is where preparing a budget plays an important role as it helps to map goals with investments. Once you allocate money for your goals and fixed costs upfront, the rest can be planned and utilised for running expenses. It is thus imperative to maintain a budget irrespective of age or life stage to successfully meet goals.

2. Prioritise your goals

Arrange your goals by order of importance. This way, you know the goals for which you could go a bit slow and goals where you do not want to compromise. For instance, between a foreign trip and retirement, the latter has a greater priority while a foreign trip can be delayed by a year or two if funding is not met.

3. Be prepared for contingencies

It is essential to have a contingency fund for unexpected emergencies. For example, contingency may occur on account of ill-health and you may be relaxed because you have medical insurance. But, what if certain aspects of health are not covered in the policy and you need to pay from your pocket? This is where a contingency fund helps as it protects regular investments (meant for goals) from being used for such exigencies. You may park about 6 months of expenses in a contingency fund and invest the corpus in a liquid fund.

4. Reduce your liabilities

Your liabilities may be on account of accumulated debt used for buying a house, a car, a personal loan or on account of credit card dues. Pay-off expensive debt like personal loans and credit card dues and use the money saved to increase your SIP. This extra money in your SIP may help you to reach some goals earlier.

So, grab a pen and paper and start mapping your goals and investments by using the above inputs and see the difference it can make to your financial plan.

Information contained in this article is not a complete representation of every material fact and is for informational purposes only. The recipient is advised to consult its advisor/ tax consultant prior to arriving at any investment decision.