🎯 The first step in financial management: Setting financial goals – a practical guide for Hong Kongers

Hello everyone! Today, I'm sharing the most important lesson for beginners on financial management—"How to Set Financial Goals." Many Hong Kong friends have zero savings at all. The key is: no goals, no direction. It's easy to give up halfway and not know where your money went. Clear goals are the starting point of any financial plan . The more detailed they are, the easier it is to stick to them! 🔑💡

🧭 Why is setting financial goals important?

• Having clear goals will motivate you to execute on them , and you won’t be a fleeting enthusiast who’s “out of work by the end of the next month.”

• The goal is the "direction indicator" of the entire financial planning. Once you have a goal, you will first know where to allocate resources and choose investment tools.

• Accurate goals allow you to measure your progress daily and make continuous adjustments.

My local example:

• If you earn $25,000 a month and spend it aimlessly, you won't be able to save enough for a down payment in five years.

• My monthly income is not much different. I plan to save $200,000 for travel expenses in three years. I will keep a fixed amount in my account and actively increase my MPF holdings. I will have a surplus in three years and successfully travel.

🗂️ How to categorize financial goals? Three major time periods

1️⃣ Short-term goals (within 1 year)

• Pay off credit card balances, save 1-2 months of living expenses, save for a new phone, and take a short trip

• Choice: Fixed deposit, money fund, basic savings

2️⃣ Medium-term goals (1-5 years)

• Saving for a wedding fund, a down payment on a home, a new car, further education, or traveling the world

• Choice: Fund investment, conservative stock ETF, regular fixed investment

3️⃣ Long-term goals (5 years or more)

• Retirement, children's education fund, property purchase, semi-retirement, entrepreneurial dreams

• Choices: Stock/ETF portfolio, high-growth fund, long-term diversified asset allocation

📝 SMART principles are essential for setting goals

Financial experts and the International Financial Association both advocate using the SMART principle to set goals. These five key points will help you avoid giving up easily.

• S (Specific) : Don't just say "I want to save money," say "I want to save NT$300,000 for a down payment in three years."

• M (Measurable) : How much should I save at least each month? How much should I have left to reach my goal?

• A (Achievable) : Calculate the amount based on income and expenditure, and don’t be too exaggerated.

• R (Relevant) : Related to your current life goals, such as changing jobs, immigrating, buying a house, etc.

• T (Time-bound) : The time limit must be specified (e.g., "save enough before March 2028").

Example rewrite

❌ I want to save money.
✅ “I want to save HK$300,000 for a down payment by March 2028, with an automatic transfer of HK$5,000 per month to my fixed deposit account.”

📊 Set your goals step by step

1. Comprehensive inventory of current situation : income, expenditure, assets and liabilities are clearly listed

2. List the things you want to achieve : from simple to complex, with short, medium and long-term stratification

3. Use the SMART principle to refine each goal

4. Reverse-calculate the monthly and weekly savings and investment amounts required

5. Write down your goals and put them in a notebook or on your phone as a reminder

6. Regularly review progress towards goals and adjust strategies as needed

💡 Editor's Tips (for Hong Kong residents)

• You can use the 50/30/20 rule (50% expenses, 30% savings + investments, 20% entertainment) / 631 rule / custom ratio

• Use a financial management app or a preset Excel spreadsheet to automatically record and analyze monthly

• If you don't have enough money, you can reduce your short-term savings target first, and then increase your medium- and long-term savings when your salary increases.

• Have a family plan and financial goals. Remember to discuss family plans together.

🎯 Editor's motto

1. "Money without direction will always help you fulfill other people's dreams!"

2. "Every financial goal is a script of success written for your future self!"

3. "Use SMART goals to create a clear financial roadmap!"

Set a low first goal and start with a small step. Five years from now (or even a year from now), you will definitely thank yourself for having a plan! 💪