How to Set and Meet Your Financial Goals
Will you have 80 percent of your current income available to finance your retirement? If not, there’s no time like the present to get your personal finances in order. When you take a strategic approach to saving and investing, you’ll be able to live comfortably.
Read on to find a quick guide to setting financial goals!
Create a Budget
Even if you think you’re frugal, do you know how much you’re saving each month? If you want to meet financial goals, you need to set a budget.
Assign portions of your monthly income to groceries, utilities, and recurring payments. Include the costs of streaming services and haircuts. In other words, capture every dollar that you spend and see how much remains after 30 days.
You may notice, for instance, that you’re breaking even each month. Or you may have underestimated the cost of groceries. Try eliminating a streaming service or cutting back on take-out to build more savings.
Pay Off Debts
Do you have student loan debt or credit card debt? If so, one of your top priorities should be paying these off to avoid the sting of steep interest rates. If you only pay the minimum amount, you may be paying well over 10% interest on credit card debt!
Best of all, you can knock out debt and improve your credit score. And by raising your score, you can secure loans on cars or houses with much more manageable interest rates.
Reserve Funds for Emergencies
When it comes to financial advice, don’t overlook the importance of shoring up your reserves. You may need a new furnace or expensive medical treatment. These unexpected costs can hurt your best efforts at fiscal responsibility — unless you’re prepared.
Try to amass around three months’ worth of costs in a savings account. You want easy access to the money, and you don’t want to expose it to the volatility of the stock market. Try to put five to ten percent of your paycheck toward this account each month.
Generate More Revenue Streams
If you’re in a job without opportunities for advancement, it may be time to plot a career change. Alternatively, you could look into taking on side hustles to supplement your main income stream.
Also, look into investing opportunities to create passive income. Open a brokerage account to invest in mutual funds, stocks, or ETFs. And be strategic with your assets to build tax free wealth.
Make Goals Measurable and Actionable
Saying that you want to save more money is very different than saying you want to set aside 15 percent of your paycheck for retirement each month. Be specific with percentages and dollar amounts as you outline goals. And write them down for accountability!
For example, make a goal of generating an extra $400 each month by driving for a rideshare service. Or try to stash $150 in retirement savings. Every quarter, review your budget and assess your progress toward short-term and long-range goals.
Start Setting Financial Goals
Setting financial goals can be the first step toward amassing the funds needed to help you live well. Start by creating a budget that sets aside money for retirement savings. Then look for ways to reduce debts and generate extra income.
Find more ways to manage your personal finances. Check back for new articles soon!