To reach your goals, you need to define them and to define your goals you need clarity on these goals. We all know that financial planning is all about creating a game plan for meeting your financial goals. But what exactly do we mean by defining financial goals. Remember, to achieve your dreams you need to translate them into goals. To attain these goals they must be broken up into smaller milestones. Defining a goal is about setting up these milestones and translating your goals into financial numbers. If you are wondering how to go about defining your goals, here are some ground rules that will help you to define your goals in a simpler and granular fashion. The most important thing about financial goals is that they cannot remain a statement of intent alone. They have to be actionable.

· Different goals have different tenures and that is the basis for connecting goals to investments. Goals may pertain to the short term like a margin for your mortgage or the long term like your retirement or for your child’s education. Either ways the time frame of the goal must be clearly defined without any ambiguity.

· Think big, without being impractical. Goals have to be ambitious; after all what else do you work towards. But goals must also be grounded and down to earth. For example, don’t start with the goal that you want to grow your money 10 times in 5 years. That is not something you can realistically plan for.

· Focus on goals that are tangible, only then they will be achievable. It must be measurable. When we talk of defining goals we talk of financial goals. A financial goal is something that can be translated into monetary terms. Generic goals like “I want to be content” or “I want to be secure” do not amount to financial goals.

· Goals are that which can be broken up into milestones. When you plan for your retirement after 30 years, it is pointless if you cannot monitor the progress towards at least once in 3 years. For that your goal setting has to be granular and they have to be broken into time-specific and monetary milestones.

· Goals are the end result of a plan or a specific need you want to satisfy. All goals must necessarily pertain to a specific need. You just save and invest just like that. You have a clear cut goal like retirement, future annuities, child’s education, child’s marriage, international holidays etc. Unless you match your plan to a pre-defined goal, you are unlikely to be able to define goals properly.

· When it comes to goals, risks matter more than risk. Goals are not just about returns but also about risks. Your focus should be to either get the maximum returns for a given level of risk or to reduce the risk for a given level of return. There are two more dimensions to your goal setting process. You need to consider liquidity and the tax efficiency of your futuristic planning.