Paying off debt is a major challenge. If unexpected expenses pop up every time you get close to getting out of debt, then it’s time to change tactics. This article will tell you all about how to set financial goals you can achieve.
Start With a Financial Plan
Without a plan, it’s challenging to achieve anything. Motivational speaker and author Zig Ziglar said, “If you aim at nothing, you will hit it every time.” The same is true in the matter of personal finance goals.
It would be best if you first narrowed down your fiscal goals. What do you want to do with your money? Keep in mind that a basic budget is a financial goal for the month while planning to put money away for retirement is one for the future. Setting goals allows you to focus on what you want financially. It also holds you accountable.
Popular monetary goals include:
• Saving for emergencies
• Eliminating debt
• Saving to retire
• Investing in your own business
• Putting money away for a vacation
• Saving up to buy a home
When you have a goal, you’ll be motivated to avoid unnecessary spending to reach it. Give yourself permission to enjoy watching your money grow. It can be just as fulfilling as spending it.
It’s important to review your relationship with money and your current financial habits along with setting goals. Research shows that a person’s neural paths search for information and patterns connected to the physical world. When they match up, humans feel more comfortable. Your internal mental state cannot let you change how you manage money unless you shift your feelings about it.
Change How You View Money
Setting a financial goal will help you change your attitude about money. It will help you see how the decisions that you make about money affect your general financial health. For instance, without a financial goal, you might be inclined to purchase an expensive coffee daily instead of brewing your own at home.
Consider that a specialty latte is easy $5 to $6. If you buy one every day and include a tip, you’ll be spending $30 to $35 a week for your favorite beverage, which is $120 to $140 a month. If you were to put that money into an investment account that pays compound interest, you could save several thousand dollars.
What Is the Best Way to Plan Financial Goals?
Step 1. Write down your goals.
When you see your goals written down, they become something tangible. You’ll be more likely to take your goals seriously and focus on making them a reality.
Step 2. Set specific financial goals.
Instead of making a vague goal to save more, choose one that’s specific. For instance, you might consider setting a plan to pay off your car in two years or save $10,000 toward an emergency fund.
Step 3. Decide how you’ll reach your goal.
If your goal is to save $10,000 for an emergency fund, then you’ll need to save $833 a month to reach it, or around $192 a week. Splitting your money goals up into manageable portions can help maintain your motivation. Keep your excitement levels high by setting smaller mini-goals that you can check off as you reach them.
Step 4. Choose a target date.
Make your goals time-sensitive. To stay inspired, plan a target date to reach each money-based goal. You can modify it later if you need to.
Step 5. Personalize your money-based goals.
It’s easy to make fiscal goals based on what others think you should be doing or what they’re doing, but it’s crucial to personalize them to what you’re striving for. That way, you’ll be reaching goals that mean something to you.
Make Saving a Habit
Often, people don’t save money toward a financial goal because they never feel they have enough to do so. When you embrace a culture of saving, you make putting money aside for something important an automatic action.
Instead of waiting for the right moment to start saving, begin right now regardless of your current income level. Make it a habit to keep a percentage of each paycheck. As time passes and finances become less tight, increase the percentage. A suitable method is to give your savings a percentage raise each year.
How to Reach Your Financial Goals
Achieve financial success by creating a plan, writing down what goals you want to achieve, and making saving money a habit. A few simple steps and changes will have you on your way to a bright financial future.
If you need more information on setting personal finance goals, I would love to help. Contact the Leonard Productivity Intelligence Institute today.