Step 1

List down all your Major Life Goals.

Financial Goals
Emergency Fund
Buy House
Retirement
Child 1 College Education
Child 2 College Education
Child 1 Marriage
Child 2 Marriage
Child 2 Foreign Post Graduation
Buy 2nd House
Foreign Trip (every 3 years)
Holiday Home
Buy Second Car
Modifications in House
Diamond Ring for Wife on 10th Anniversary
Foreign Trip for Parents
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Step 2

Rationalize the list of your life goals.

Financial Goals Rationalize

Emergency Fund
Buy House
Retirement
Child 1 Higher Education
Child 2 Higher Education
Child 1 Marriage
Child 2 Marriage
Child 2 Foreign Post Graduation Child should self fund it
Buy 2nd House
Foreign Trip (every 2-3 years)
Holiday Home Difficult to achieve in current income
Buy Second Car
Modifications in House
Diamond Ring for Wife on 10th Anniversary
Europe Trip for Parents
Payoff Car loan Added
Contribution in sister in law's wedding Added
Step 3

Tag goals as 'Need' or 'Desire'.

Tag as Need or
Financial Goals Desire
Emergency Fund Need
Buy House Need
Retirement Need
Child 1 Higher Education Need
Child 2 Higher Education Need
Child 1 Marriage Need
Child 2 Marriage Need
Buy 2nd House Desire
Foreign Trip (every 3 years) Desire
Buy Second Car Desire
Modifications in House Desire
Europe Trip for Parents Desire
Payoff Car loan Need
Contribution in sister in law's wedding Desire
Step 4
Write the Timeline, when Goal need to be met & categorize it as Immediate, Short-term, Mid-term
and Long-term goals.

Financial Goals Timeline Need/ Desire

Emergency Fund Today Need

Immediate (less than 1 year)

Payoff Car Loan Within 6 months Need
Contribution in sister in law's wedding Within 12 months Desire

Short Term (1-3 years)

Buy House 3 years Need
Buy Second Car 2 years Desire

Medium Term (3-7 years)

Foreign Trip (every 3 years) 3 Years Desire
Modifications in House 5 Years Desire
Europe Trip for Parents 4 years Desire

Long Term (7+ years)

Retirement 20 years Need
Child 1 Higher Education 9 Years Need
Child 2 Higher Education 12 years Need
Child 1 Marriage 15 years Need
Child 2 Marriage 18 years Need
Buy 2nd House 12 years Desire
Step 5

Find Cost of each Goal Today

Financial Goals Timeline Need/ Desire

Emergency Fund Today Need

Immediate (less than 1 year)

Payoff Car Loan Within 6 months Need
Contribution in sister in law's Within 12 months Need
wedding

Short Term (1-3 years)

Buy House 3 years Need
Buy Second Car 2 years Desire

Medium Term (3-7 years)

Foreign Trip (every 3 years) 3 Years Desire
Modifications in House 5 Years Desire
Europe Trip for Parents 4 years Desire

Long Term (7+ years)

Retirement 20 years Need
Child 1 Higher Education 9 Years Need
Child 2 Higher Education 12 years Need
Child 1 Marriage 15 years Need
Child 2 Marriage 18 years Need
Buy 2nd House 12 years Desire
 Step 6

Prioritize Goal

Cost Today Financial Goals Timeline

Rs. 4 Lacs Emergency Fund Today

Immediate (less than 1 year)

Rs. 3 Lacs Payoff Car Loan Within 6 months
Contribution in sister in law's
Rs. 2 Lacs Within 12 months
wedding

Short Term (1-3 years)

Rs. 20 Lacs Buy House 3 years
Rs. 5 Lacs Buy Second Car 2 years

Medium Term (3-7 years)

Rs. 5 Lacs Foreign Trip (every 3 years) 3 Years
Rs. 8 Lacs Modifications in House 5 Years
Rs. 5 Lacs Europe Trip for Parents 4 years

Long Term (7+ years)

Rs. 3 Crores Retirement 20 years
Rs. 20 Lacs Child 1 Higher Education 9 Years
Rs. 20 Lacs Child 2 Higher Education 12 years
Rs. 25 Lacs Child 1 Marriage 15 years
Rs. 10 Lacs Child 2 Marriage 18 years
Rs. 50 Lacs Buy 2nd House 12 years
Need/ Desire Priority Cost Today
Need 1 Rs. 4 Lacs

Need 2 Rs. 3 Lacs

Need 3 Rs. 2 Lacs

Need 5 Rs. 20 Lacs

Desire 14 Rs. 5 Lacs

Desire 12 Rs. 5 Lacs

Desire 8 Rs. 8 Lacs
Desire 11 Rs. 5 Lacs

Need 4 Rs. 3 Crores

Need 6 Rs. 20 Lacs
Need 7 Rs. 20 Lacs
Need 9 Rs. 25 Lacs
Need 10 Rs. 10 Lacs
Desire 13 Rs. 50 Lacs
 Step 7

Assumptions such as Inflation Rate and Expected Rate of Return p.a.

Financial Goals Timeline

Emergency Fund Today

Immediate (less than 1 year)

Payoff Car Loan Within 6 months
Contribution in sister in law's Within 12 months
wedding

Short Term (1-3 years)

Buy House 3 years
Can postpone it to later year.
Medium Term (3-7 years)
Foreign Trip (every 3 years) 3 Years
Modifications in House 5 Years
Europe Trip for Parents 4 years

Long Term (7+ years)

Retirement 20 years
Child 1 Higher Education 9 Years
Child 2 Higher Education 12 years
Child 1 Marriage 15 years
Child 2 Marriage 18 years
Buy 2nd House 12 years
ed Rate of Return p.a.

Need/ Desire Priority Cost Today Inflation

Need 1 Rs. 4 Lacs

Need 2 Rs. 3 Lacs 7%

Need 3 Rs. 2 Lacs 7%

Need 5 Rs. 20 Lacs 7%

Desire 12 Rs. 5 Lacs 7%

Desire 8 Rs. 8 Lacs 7%
Desire 11 Rs. 5 Lacs 7%

Need 4 Rs. 1 Crore 7%

Need 6 Rs. 20 Lacs 10%
Need 7 Rs. 20 Lacs 10%
Need 9 Rs. 25 Lacs 7%
Need 10 Rs. 10 Lacs 7%
Desire 13 Rs. 50 Lacs 7%
 Step 8

Current Asset Tagging

Expected Rate of Financial Goals

Return p.a.
4% Emergency Fund

Immediate (less than 1 year)

6% Payoff Car Loan
6% Contribution in sister in law's wedding

Short Term (1-3 years)

8% Buy House

Medium Term (3-7 years)

8% Foreign Trip (every 3 years)
10% Modifications in House
10% Europe Trip for Parents

Long Term (7+ years)

12% Retirement
12% Child 1 Higher Education
12% Child 2 Higher Education
12% Child 1 Marriage
12% Child 2 Marriage
12% Buy 2nd House
Timeline Need / Desire Priority Cost Today
Today Need 1 Rs. 4 Lacs

Within 6 months Need 2 Rs. 3 Lacs

Within 12 months Need 3 Rs. 2 Lacs

3 years Need 5 Rs. 20 Lacs

3 Years Desire 12 Rs. 5 Lacs

5 Years Desire 8 Rs. 8 Lacs
4 years Desire 11 Rs. 5 Lacs

20 years Need 4 Rs. 1 Crore

9 Years Need 6 Rs. 20 Lacs
12 years Need 7 Rs. 20 Lacs
15 years Need 9 Rs. 25 Lacs
18 years Need 10 Rs. 10 Lacs
12 years Desire 13 Rs. 50 Lacs
 Expected Rate of Current Asset
Inflation Details
Return p.a. Value
4% Rs. 4 Lacs Saving Balance

7% 6% Rs. 1 Lac Saving Balance

7% 6% Rs. 0.5 Lacs Liquid Fund

7% 8% Rs. 2 Lacs FD

7% 8% Rs. 0
7% 10% Rs. 0
7% 10% Rs. 0

7% 12% Rs. 20 Lacs Equity MF

10% 12% Rs. 5 Lacs SSY
10% 12% Rs. 0
7% 12% Rs. 0
7% 12% Rs. 0
7% 12% Rs. 0

Be careful with calculations.

Seek professional help if you don't know how to find the answers
 Step 9

Linking of the Savings/ Savings Linking

ShortFall Financial Goals

0 Emergency Fund

Immediate (less than 1 year)

Rs. 2 Lacs Payoff Car Loan
Rs. 1.5 Lacs Contribution in sister in law's wedding

Short Term (1-3 years)

Rs. 18 Lacs Buy House

Medium Term (3-7 years)

Rs. 5 Lacs Foreign Trip (every 3 years)
Rs. 8 Lacs Modifications in House
Rs. 5 Lacs Europe Trip for Parents

Long Term (7+ years)

Rs. 2.8 Cr Retirement
Rs. 15 Lacs Child 1 Higher Education
Rs. 20 Lacs Child 2 Higher Education
Rs. 25 Lacs Child 1 Marriage
Rs. 10 Lacs Child 2 Marriage
Rs. 50 Lacs Buy 2nd House

't know how to find the answers

 Timeline Need / Desire Priority Cost Today
Today Need 1 Rs. 4 Lacs

Within 6 months Need 2 Rs. 3 Lacs

Within 12 months Need 3 Rs. 2 Lacs

3 years Need 5 Rs. 20 Lacs

5 Years

3 Years Desire 12 Rs. 5 Lacs

5 Years Desire 8 Rs. 8 Lacs
8 Years Rs. 5 Lacs
4 years Desire 11 Rs. 3 Lacs

Rs. 1 Crore
20 years Need 4 Rs. 80 Lakhs
9 Years Need 6 Rs. 20 Lacs
12 years Need 7 Rs. 20 Lacs
15 years Need 9 Rs. 25 Lacs
18 years Need 10 Rs. 10 Lacs
12 years Desire 13 Rs. 50 Lacs
 The End

Expected Rate Current Asset

Inflation ShortFall
of Return p.a. Value
4% Rs. 4 Lacs Rs. 0

6% Rs 1 Lac Rs 2 Lacs
7% 6% Rs. 0.5 Lacs Rs. 1.5 Lacs

7% 8% Rs. 2 Lacs Rs. 18 Lacs

9%

7% 8% Rs. 0 Rs. 5 Lacs

7% 10% Rs. 0 Rs. 8 Lacs
Rs. 5 Lacs
7% 10% Rs. 0 Rs. 3 Lacs

Rs. 80 Lacs
7% 12% Rs. 20 Lacs Rs. 60 Lakhs
10% 12% Rs. 5 Lacs Rs. 15 Lacs
10% 12% Rs. 0 Rs. 20 Lacs
7% 12% Rs. 0 Rs. 25 Lacs
7% 12% Rs. 0 Rs. 10 Lacs
7% 12% Rs. 0 Rs. 50 Lacs
 Step Up
Monthly Monthly Goal
Investment Investment Achievable?
Required
0 Required
0 Yes

33000 33000
12500 12500

51700 47000
34800 29000

14400 13000
13800 11500
10000
10,500 7300
9200
7,000 6100

82000 39000
64000 30000
16500 11800
19100 12100
13600 7800
4500 2300
34400 22000

Be careful with calculations.

Seek professional help if you don't know how to find the answers