There is no time like the present to get started setting achievable financial goals. Every day you wait, is another day of delay in reaching your financial dreams.
If you’ve had trouble in the past setting goals for your finances, or you have set goals, only to find they’ve been difficult to keep, now is the time to change that. Read on to discover easy-to-use tips that will speed you on your way toward a happy and financially healthy future.
What Do You Want to Accomplish?
Before you can set a goal, you need to know what you want to accomplish and how to organize your resources to succeed. Financial resolutions should be about putting your budget in order and maintaining your personal financial health. Here are the most common types of goals that people identify:
- Debt reduction (or elimination) is an excellent goal if you have any unsecured or credit card debt, which usually has a high-interest rate. This kind of debt results in the most non-productive use you can make of your money. You are spending money on interest, rather than using it to accomplish your goals.
- Building an emergency savings account is also a great goal. This is one that everyone should work towards, since everyone experiences financial emergencies of some kind. You may need to replace a water heater, pay for a flight to visit a sick family member, or need funds to see you through a period of unemployment. Whatever the emergency, having some money set aside to take care of it means that your finances won’t be thrown into a crisis.
- Short, medium and long-term life goals. These are usually set as a family, and reflect your priorities in life. Financial goals like saving for major purchases have double benefits—you avoid debt and build your savings at the same time. These goals also allow you to work toward the things that are most important to you and your family. Goals help you avoid impulse purchases.
Once you identify your goals, prioritize them and write them down, then set priorities. It is usually good to have short term, medium-term and long-term goals to work on. The short term goals are achieved more quickly, and help to keep your motivation up. Next, figure out the cost of reaching each goal and rework your budget to make room for your new resolutions. Some goals may have to wait until others are accomplished. For example, paying off credit cards may need to come first before you will be able to save for other high priority goals.
Are Deadlines Part of Your Planning?
By not choosing a time-frame to accomplish your financial goals, you allow wiggle room in your plans that can make success difficult. Consider procrastination an enemy and prevent failure by setting up reasonable, date-related milestones.
Record each milestone in a planner or on a calendar. Set a time each month to review and rework your plan as needed. Monitor upcoming expenses that might undermine your plans and act quickly if you see potential challenges. Make sure that your monthly budget is still working for you. Budgets are not set in stone. They need to be updated regularly to reflect current circumstances. If you get a raise, or change jobs, the budget will need to be reworked.
How Can You Keep Track of Your Progress?
Writing down your financial goals is a good first step toward realizing your financial goals. It’s equally important to monitor your progress and keep track of goals you reach along the way. You can use a calendar to
- set up time-related milestones
- keep track of progress
- record your completed goals
Make sure you post your calendar and deadlines where you can see them and refer to them often. Just as importantly, make sure you have an updated monthly budget, and keep track of where you are spending your money. If you are not staying on budget for monthly expenses, you will find yourself taking funds from goals to meet daily needs.
Making Spending Less and Enjoying More a Part of Your Plan
As you work toward achieving your financial goals, it will probably be necessary to spend less than you have previously. Along the way, you may discover that spending less is actually providing you with more — more peace of mind, more time for the things you enjoy, and more resources to accomplish your goals. This new way of looking at how you spend your money can help you become a wise money manager and allow you to enjoy the journey toward freedom from debt. If debt is a substantial barrier to achieving your goals, you may need to seek professional help to get it behind you. A Licensed Insolvency Trustee can give you the most complete information and advice. Our Trustees are always available to help get you started in a new direction. If debt is holding you back, give us a call today.
A Bright Financial Future Can Be Yours
Setting financial goals makes it possible to realize your dreams for the future. So much of what you want to accomplish depends on smart money management, so continue to set goals and work to achieve them. The sooner you get started, the sooner you will achieve your financial dreams.