Financial Goals (With Islamic Consideration)
Financial goals are specific objectives or targets individuals or households set to achieve financial stability, security, and prosperity. These goals serve as benchmarks for guiding financial decision-making, budgeting, saving, investing, and planning for the future. Financial goals vary widely depending on an individual's life stage, priorities, and aspirations.
Financial goals must be specific, measurable, achievable, relevant, and time-bound (SMART) to be effective.
It is also essential to regularly review and adjust these goals as circumstances change to maintain a sound financial plan.
Traditionally, financial goals can be divided into short-term (<1 year), intermediate-term (1-5 years), or long-term (>5 years).
Short-term goals: The most important thing is to build an emergency fund and pay off your credit card debt. Others are saving for medical expenses and property repair, a car down payment, or a vacation.
Intermediate-term goals: Saving for a marriage, for house down payment, for your own education or student loans, improving your job or business,
Long-term goals: Paying off home loans, saving for retirement, saving for children's education, and estate planning.
I like to set goals chronically, as below. Keep in mind that you do not have to finish the first goal to move to the second one, as many of them overlap, and many of them are lifetime goals.
Personal development
Rewarding job
Readiness for emergency
Establishing a family
Owning a home
Comfortable living
Debt Reduction
Saving for hajj
Growing wealth
Saving for children's education
Saving for retirement
Charitable Legacy
Islamic consideration in setting financial goals
Spiritual personal development is more critical than education and career development.
Your job must be compatible with Islamic values
Make sure you establish a Muslim family
Use interest-free transactions when buying a home and car
Use ethical and Islamic-compatible investments for savings
Pleasing Allah is more satisfying than increasing material assets
Performing hajj is an important goal
Supporting parents and sometimes siblings and other relatives is essential as an additional financial goal
Charitable giving is not only a tax strategy but also a religious duty