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Money, tax and benefits

Money, tax and benefits

Setting financial goals

Financial goals can help you plan your finances more efficiently. You can set one goal - or several goals as part of an overall financial plan. The products suitable for achieving your goal or goals will depend on your resources and individual factors, like timescales and attitude to risk.

Short and long-term financial goals

Financial goals can be short to medium term, like clearing an overdraft or paying off a loan, or long-term like saving enough for retirement. Your goal might be linked to a purchase, like buying a car or house, or to the desire to know that you can provide for your dependants in the future.

To help you identify financial goals that could form part of an overall financial plan you can take the Financial Services Authority (FSA) financial healthcheck on their ‘Moneymadeclear’ website.  The FSA is the UK financial watchdog.

 Bear in mind that you may have to set new financial goals if something changes unexpectedly in your life, like divorce or loss of a job.

Money to help meet your goals

Once you've identified your goal or goals your first step is to see what finances you have available to put towards them. You may find that you can meet one or more of your goals from existing funds.

The FSA offers tips on how to get to grips with your money, and an online budget calculator that will tell you how much income you have left each month. It also offer tips on how you might be able to boost your income.

Buying suitable financial products

If you need to save or invest in a financial product in order to meet your financial goal, the one that's most suitable will depend on a number of factors including:

  • what your financial goal is (some products are goal-specific, like mortgages and pensions)
  • when you want to achieve your goal
  • how much you can afford
  • whether or not you're a taxpayer
  • your attitude to risk
  • your state of health

Shopping around or getting advice

Once you've identified the right type of financial product, you can shop around yourself and compare deals or get financial advice. If you buy without advice you have less protection than if you buy with advice. Read our related articles under 'In this section' below.

Reviewing your finances and goals

Remember that as things around you change, your financial goals may need to change too. You'll need to review short to medium-term goals regularly and longer-term goals, like repaying your mortgage or pension fund contributions, yearly. You'll also need to review them if your circumstances change.

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In this section...

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