A financial plan is always drawn up taking into account financial goals - this is a kind of guiding star that helps to take care of your capital.

 

After all, if you understand that buying a device that will soon gather dust to the sidelines with others will postpone the achievement of your goals, then, most likely, the desire to make rash purchases will be an order of magnitude less.

There can be several financial goals. For each of them, it is important to determine the amount, currency and term. To be realistic, it is better to calculate the criteria with a margin of 10-20%.

 

Examples of possible goals:

  1. save money for a down payment on a mortgage by the end of 2023;
  2.  
    ensure an increase to the pension equal to 5,000 dollars per month;
  3.  
    by the 18th anniversary of the child to save up for training in a good university.
     

    What parameter should be calculated before setting a financial goal?

    The amount, currency and terms!

    Step 1. Calculate the target taking into account inflation

    First of all, you need to calculate what the amount of your goal will be equal to by the time it is achieved, since we remember that due to inflation, 10 dollars today is not the same as 10 dollars five years ago.

    Inflation is the process of rising prices of goods and services. To calculate it, the consumer price index is used, a statistical indicator that reflects the change in the cost of a set of certain goods and services.

     

    Inflation = consumer price index - 100%.

     

    The CPI is calculated based on the set of goods and services that the average family most often buys.

    Consumer price indices for all goods and services in 2014-2021 at the end of the period, in % to December of the previous year

    The average inflation over the past ten years was 6.6%, and by the end of 2021 - 8.4%.

     

    However, these indicators are valid for the average basket, each household will have its own inflation. Inflation for goods and services that each particular person or household consumes is personal inflation. You can calculate personal inflation by analyzing the dynamics of personal income and expenses.

    So, in order to calculate the future value of the financial target, it is necessary to take into account the level of inflation.

     

    The calculation of the amount for the financial purpose will look like this:

     The cost of the target today x (1 + inflation)^the period until the goal is reached

    Suppose you want to save up for a child's education at Moscow State University (four years in the bachelor's degree). Now he is ten years old, he will graduate from school at 18, and the cost of studying at Moscow State University in the 2021 academic year averages 39,100+ dollars per year.

    The cost of the target today = 156,000 dollars

    How much money do you need to collect in order to purchase a thing that now costs 1.5 million rubles in three years? You assume that the average inflation will not exceed 7%.

     
    To assess whether it is realistic to accumulate the required amount for the specified period, calculate the amount of monthly deductions.
     

    Step 2. We evaluate our capabilities

    After you have calculated the amount of monthly savings for your purpose, it is necessary to assess whether you will be able to save such an amount now, because for sure this is not your only goal. Or, conversely, you will realize that you can save more.

    If the monthly payment is unbearable for you, you can:

    1.  
      increase the duration of the goal;
    2.  
      reduce the amount of the goal.

    If your income increases or, conversely, decreases, you need to evaluate the process of achieving the goal every six months to a year and, if necessary, adjust it.

    Briefly about the main thing

    1.  
      There can be several financial goals, for each it is important to determine the amount, currency and term.
    2.  
      Inflation is the process of increasing the cost of goods and services. To calculate it, the consumer price index is used - a statistical indicator that reflects the change in the cost of a set of certain goods and services.
       
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