We all have financial goals that we hold dear to our hearts. We all want to achieve them; nobody wants to be left behind. As parent, your biggest wish might be to secure college funds for your wards. It’s the best asset you can bequeath them. Someday you want to wake up to a beautiful view in a shelter you can call your own. May be you are worker who has had enough of that boring 9 to 5 job and you can’t wait to retire. Life promises zero assurance to no one and you don’t have a single dime save up for emergencies. Your credit card score is so poor you can’t even secure rent with it.
Achieving financial goals can be very challenging. Our personal incomes growth doesn’t reciprocate the rise in costs of living we continue to incur. With each day passing, standards of living are rising. Our incomes continue to suffer from unfavorable taxations policies. When you calculate how much you are left with after expenditure, you realize you are left with amounts close to nothing. How do you overcome all these hurdles and achieve your dream financial goals? Below are some useful steps you can follow to get there:
Identify your goals
The first step in the right direction in achieving your goals is to sit down and identify your financial goals. What are you aiming to achieve? Are you looking to retire early? Is your ultimate dream owning a home and setting up college funds for your kids? Do you want to clear up your debt and set up an emergency fund? Whatever your financial goals are, name them.
List them in order of priorities
The next step to take is to draw out the list of your goals in order of priorities. Just like the concept of opportunity cost. Organize them into categories: long term goals, midterm goals and short term goals. After categorizing goals, the next thing to do is run their estimate. Have a concrete idea of how much it will cost you to arrive at each and every goal. If I am to retire early, how much money do I need to save to arrive there? If I am to buy my dream car, how much money is it going to cost me?
Organize your finance
First and foremost, devote some time to learn about financial management. You can do that by consulting financial matters experts, reading scripts about money management, and watching educative videos online. Your partner should be party to any financial plan so make sure he or she is part of the whole process. Review your bank and credit card statements, tax returns, insurance, and every other finance related document. Reviewing how you have been spending your monthly income will give you an idea of how well you have been doing with your finance and areas that require improvement.
Cut financial wastage
Reviewing your expenditure will provide you concrete information about your spending leaks. Identify those areas and device a plan to counter them. For instance, you have developed the habit of eating out that has been costing you money. Also, you have issue sticking with your purchase plan. After identifying all the leaks in your spending, now is the time to make amend. If you are fund of buying expensive coffee outside, it’s time for you start preparing yours at home and save some money. When going to work, park some lunch instead of buying in a cafeteria, it will save you handsome amounts of money. If you lack discipline sticking to your purchase plan, stop going to store with your credit card use cash instead. Look for bargains, avoid excessive use of your credit card.
Make effort to decimate your debts
If you want to achieve your financial goals in life, the last thing you need is excessive debts hanging over your head. Develop a plan that will get you out of debts. Be it students loans, car loan or any debt. You don’t need debts hovering over your head. Spend less, work overtime, and fix all your spending leaks. Whatever it takes to get you out of debt, do it. Your total consumer debt should be at least less than 20% of your net income. Organize your debts in order and start by paying off debts with higher interest rates.
Live less than you earn
Unequivocally, the gateway to your financial goals is contingent upon how you save. If you don’t save, you will be left with nothing. If you are the type who lives above his or her means, then you can draw the curtain on your financial goals because you are getting nowhere close to them with such profligate habit. Design a budget that can aid you to save money and stick to it religiously. Many people only save after expenditure but I say save before expenditure. Pay yourself first before anyone. Dedicate a certain amounts of your income and have your bank to be saving them automatically for you.
Invest, invest and re-invest
Saving money can lead you to your financial goals but investing them will get you there even faster. Your pile up savings is safer in a bank but they are less profitable. Investing comes with a risk but it is by far more productive. There are several things you can invest in that will get you to your financial goals. You can consider saving in real estate and overtime, the value of the property can appreciate and you can also rent the property out. You can buy stocks and its value can rise overtime. In 2015, Beyonce traded a cash payment of $5m from Uber for stocks and today her stocks are worth $300. You can buy bonds and after a certain time, you will receive your investment back plus interest.