Where do you see yourself in 5 years?

~ Every Interviewer Ever

“Where do you see yourself in five years?” is a question we’re certain to encounter during a job interview. For many of us, it is not hard to imagine the developments in our personal lives five years from now. We may have paid off our student loans, tied the knot, adjusted to life in an unfamiliar city or become a homeowner. On the career front, the five-year timeline generates certain expectations. However, when we move on to the personal finance aspect of our lives, visibility reduces significantly. Do you know how much wealth you could accumulate in five years? Do you know what you should provide for financially speaking over the next five years? Do you know how changes in your personal and professional life could impact your financial life?


Setting financial goals could help you answer these questions with ease. Not many of us are used to thinking in financial terms, so setting financial goals may seem daunting. Let’s start with a simple exercise:

What would you do if money wasn't a constraint?

What are you doing because money is a constraint?

The answers to your first question are your aspirations. Each and every one of us have dreams that we would like to fulfil – whether it’s owning a sports car, buying a designer handbag, retiring early, or traveling the world. We recognise that these are nice to haves and are a part of our ideal lifestyle. However, present circumstances may not be able to support these aspirations. Financial planning can help you play your cards right and get you as close to your aspirations as is realistically possible.

On the other hand, your responses to the second questions are reflective of your financial commitments. Many of us will have financial dependents at some stage in our lives – dependents could be aging parents, growing children, a spouse, or even a cause. Supporting dependents are closely linked to life goals such as providing for retired parents, educating children, buying a home, or working with a charity organisation. Financial planning can help chart out a timeline of your financial commitments and prioritize them. Through financial planning, you could actually secure the financial interests of your dependents.

If those questions didn’t shed light on what you want from your money, you could start with one or more of these goals:


Make Well Informed Decisions

Focus on improving your financial literacy. Become aware of what your investment options are and check your risk profile. Consult a professional financial planner or investment advisor when making investment decisions. Work with them to get your financial affairs in order, by reviewing and consolidate past decisions. Construct a habit of recording what you’ve learnt from every decision you make. Build a framework that will guide you towards productive decision making


Stop Living Paycheck to Paycheck

Some of us are unable to visualize goals, because we’re caught in the cycle of living paycheck to paycheck. It can be overwhelming to imagine a way out of such a rut, but it can be achieved if you tackle the problem head on. This is not always easy to do on your own, especially because there may be blind spots on the expense side or loans that you are servicing. If you’re stuck in a debt trap working with a planner could gradually improve your financial situation until you reach normalcy. If you’re expenses need management, self-discipline is the panacea. Working with a budget is often passed off as a remedy, but budgets are not everyone’s cup of tea. A smarter solution would be to start by automating savings and working with less to spend.


Follow A Long Term Investment Approach

If your ship is sailing smoothly and there aren’t too many habits that you have to correct and you’re financially literate, you could start following a long-term investment approach. Many of us in the early stages of our career can’t gaze into the crystal ball of our future to predict our financial needs. However, it’s never too early to prepare for the future. So start saving for a rainy day or a distant day in the future where a little bit of extra money would be handy. In the worst case, you end up with a windfall – and that’s actually a pretty good outcome!


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