Everyone has a different objective in life. Some might want a big house, others might want to retire early. Most of our objectives will require some kind of monetary aid. So setting your financial goals, is crucial in order to achieve your desired lifestyle.
So what are financial goals? How can I figure out mine?
A financial goal is the perfect finance level you need to be able to do want you aspire. In order to achieve your financial goals, you are going to need to work step by step, as explained below:
Figure out your long-term goals
Start thinking about what you financial goals are, by answering the following questions:
- What do you want in life?
- How much money will you need, realistically?
- In how long?
- What about after, particularly for retirement?
At this stage, you should prepare SMART goals. This step is an absolute must, so that you can start working towards your goals.
Create a budget
Now that you know how much money you’re going to need, you should start figuring out ways how to get it. Find out how much money you can save by creating an achievable budget. If you don’t think your savings will suffice, start thinking about other ways how you can increase your income. To increase your income, read about how to make money on the side or 7 businesses you can start with $100 or less.
Pay off debts
Debts definitely get in the way of your financial goals. Not only do debts increase your stress, but they also tend to increase themselves over time(especially those with high interest rates like credit card debts!). So first things first, read about how to get rid of your debts fast. Make sure you treat debt repayments as an expense in your budget, don’t leave it out!
Create an emergency fund
Year after year, your savings will start to grow considerably. But without an emergency fund, those savings are not really savings. If something were to happen, like maybe sudden unemployment or an injury, you would need to use those “savings”, hence moving away from your goals. Building an emergency fund, lets you be covered for any unexpected cost that might happen AND give you a realistic sense of how close you are to your goal. If you’re not convinced yet, read 20 reasons why you need an emergency fund.
Use separate bank accounts
Having different bank accounts for living expenses, savings and for your emergency fund, is a key factor in achieving your financial goals. Not only will you not overspend this way, but you also get to visually see your progress.
Use apps to keep track of your financial goals
When you’re shopping, in bed or if you’re traveling, you may want to check your budget/progress. Or maybe you need to amend something. Budgeting and financial apps are a great way to keep everything in check when on the go. Discover some of the best budgeting apps out there.
Setting your financial goals is essential in everyone’s life, in order to achieve their desired lifestyle. So start early to have plenty of time to work towards your goals.
What are your financial goals? Do you have your plan figured out? Share with us in the comments!