How to Set and Meet Financial Goals
About 75% of Americans are winging it when it comes to their finances. This means they have no future financial goals and are hardly managing their money. Now, understandably so, because money is a complicated topic for most people, especially when managing debt and setting financial goals.
Now, get this, only about 30% of Americans have a long-term financial plan, and about 40% have only $300 in savings. These are worrying statistics, which is why payday loans, title loans, and personal loans are on the rise.
If you want to set some attainable financial goals that are realistic, then this article will be able to help you. Use these tips below to help you write your game plan about setting and meeting financial goals.
Figure Out How Much Money You Need
Before you can set goals, you need to know how much money you actually need. The first step in setting financial goals is to define what you want to achieve. Do you want to save for a house or a car?
Or maybe you’d like to start investing and grow your wealth over time. Whatever your goal, be clear about what it is. This may seem like a difficult task, but it is important to be realistic about your expenses and what you actually need in order to live comfortably.
Track all of your spendings for at least a month so that you can get an idea of where your money goes each month. Once you have this information, subtract your necessary expenses from your monthly income. The difference is the amount of money you have leftover to save or put towards debt.
Set Specific, Measurable, Attainable, Relevant, and Time-Based (SMART) Goals
Now that you know how much money you need, it’s time to set some goals. Financial goals should be specific, measurable, and time-based. For example, instead of simply saying you want to save more money, say you want to save $500 by the end of the year.
There should also be a deadline attached to your goal (attainable), and it should be relevant. For instance, if you don’t have any debt, then saving money is not as important as paying off student loans.
Make sure that your goals are realistic and possible for you to reach. If you’re struggling with setting achievable financial goals on your own, consider seeking financial help from a professional or peer mentor who can assist you in this process.
Determine Where You Need Help
Financial planning is a daunting process for many people, so you may need some help to meet your goals. This could mean getting a second job, picking up a side hustle, or even reconsidering your expenses and making some changes there. If you’re finding it difficult to save money each month, then start by looking at your budget and see where you can cut back.
Maybe you can reduce the amount of money you spend on groceries or entertainment. There is no shame in admitting that you need financial help.
Sometimes it takes an outside perspective to get us back on track financially. There are many professional financial planners such as bottofinancial.com that will help you achieve your goals.
Create a Plan of Action
Now that you know your financial goals, where the money will come from, and when it will be achieved, make an action plan for achieving it in the timeframe set out. Decide on the steps you need to take and find out whether there are any resources or tools available to help you achieve this financial goal faster or more efficiently.
Make sure your financial goals don’t become overwhelming by breaking down big tasks into small pieces. This way, it’ll be easier to do them one by one until they add up to complete the bigger task.
You’ll always have a sense of accomplishment and know when you’re on track to meet your financial goal. For instance, you can start by saving $50 per week and once that becomes easy, bump it up to $100 per week. And so on.
Now, the most important part of meeting financial goals is following through with your plan. Keep track of how much you’re saving and investing every month, be it for a house down payment or an investment portfolio. If you need help doing this, keep financial records on your computer or get financial software that calculates your progress automatically.
Automate Your Finances Where Possible
Automating your finances can help make it easier to reach your financial goals. Have your bank account automatically deduct money from each paycheck and save it into a separate account earmarked for your financial goals. This eliminates managing finances on your own, and you can’t overspend money if it doesn’t go through your hands.
You can also set up an automatic investment plan that will invest a fixed sum of money into specific funds or securities every month. This helps take the guesswork out of financial goal setting and makes it less likely that you will forget to save or invest.
Review Your Financial Goals Regularly
Managing finances is not easy, so financial goals should be reviewed on a regular basis. You need to make sure they are still relevant and achievable.
Sometimes our life circumstances change, so our financial goals need to change too. Revisit your goals every six months or so to make sure they still reflect your current situation.
The last step is staying motivated throughout the process. This can be difficult when times get tough or when you don’t see results immediately. It’s important to have a support system in place, whether that be friends and family who are willing to help.
You could also find an accountability partner who can help keep you on track. Make sure to celebrate your accomplishments along the way, no matter how small they may seem. Meeting your financial goals can be a challenging but rewarding process, so use these financial tips to get started on the right foot.
The Ultimate Guide to Setting and Meeting Financial Goals
Managing finances is a complicated endeavor for most people, especially when managing debt, investing, or setting financial goals. If you want to set some attainable financial goals, follow the financial tips above, and you’ll be well on your way to financial freedom.
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