Setting financial goals at any age is never too late! From your 20s through your 50s, setting financial goals can keep your finances on the right path, and here are ten easy ones that may get the ball rolling for you.
Establish an emergency fund covering at least six to twelve months of living expenses.
One of the critical goals in financial smart goal setting should be creating an emergency fund. An emergency fund provides a cash reserve set aside in case unexpected expenses such as job loss, medical emergencies, or car repairs arise.
Goal 1 should save enough money to cover basic living expenses for at least 6-12 months without turning to credit card debt or loans as a funding source.
Review your budget to see how much you can save each month – even $50 significantly impacts. After identifying that number, open an emergency fund savings account to avoid thoughtless spending!
Successful emergency fund creation comes down to prioritizing saving for it. When your savings account covers at least six months’ living costs, you will thank yourself!
Repay all high-interest debt.
Making an aggressive effort to eliminate high-interest debt is an excellent goal. High-interest debt can severely damage your finances and threaten your security and peace of mind.
Consider consolidating your debt into one loan with lower interest payments. This could save money and simplify debt repayment.
Repaying high-interest debt may seem daunting, but it can certainly pay dividends. Doing so will ease financial anxiety while freeing up funds for other smart goals or retirement savings. Doing this also lays a solid foundation for your financial future.
Invest 15% of Your Income In Retirement Accounts.
Setting long-term financial goals requires planning. One financial plan should invest 15% of income into retirement accounts by 2024.
There are various retirement accounts you can invest in, such as a 401(k), IRA, and Roth IRA, depending on your specific needs and circumstances. Whatever you select, investing in retirement accounts is one of the wisest moves for your financial future.
Investment in a retirement account offers several key advantages. Primarily, investing allows you to save for retirement tax-deferred, so your contributions won’t need to be taxed until it comes time for withdrawal at retirement age.
Reinvestment occurs when the interest you earn on an investment is reinvested to grow it faster than by saving it in an account. It allows the returns from investments like mutual funds to compound more quickly.
Start investing now for your financial future by opening a retirement account! It could be one of the smartest moves to take.
Draft or update Your Will and Beneficiary Designations Forms
An estate plan can be vital, particularly if you have young children and own significant property assets. Unfortunately, however, many procrastinate in creating their will as the process can seem intimidating – without one, your estate will likely be distributed according to state intestacy laws rather than as you had intended.
Updating beneficiary designations is also essential, as these supersede your will. For instance, if your life insurance policy names your spouse as a primary beneficiary but your choice leaves all proceeds for their use by children. Instead, that policy’s proceeds may still go directly to her rather than theirs.
Making and updating a will and beneficiary designations may not seem exciting financial goals to achieve, but taking care of these matters will provide peace of mind that your affairs are properly managed.
Confirm that your insurance coverage provides adequate protection.
As most people, chances are good you haven’t reviewed your insurance coverage much lately. Your car, life, and health policies likely remain similar from when they were initially acquired, but as life unfolds, so do our insurance needs change.
Review your insurance at least annually to ensure it still fits your needs and offers competitive rates and coverage options.
Reviewing your insurance will save money and ensure you’re adequately covered if an unexpected incident arises.
Design or update a financial plan that details both short- and long-term goals
Setting financial goals may seem intimidating, but putting them doesn’t have to be by breaking them into more manageable chunks and creating an action plan for both short- and long-term objectives.
Asserting this question will enable you to develop the optimal financial planner.
What is my current financial status?
Knowing where you stand in your financial situation allows for setting realistic goals.
And what are my financial goals for 2018/19, such as saving for a downpayment on a house or paying off student loans?
Are You Saving For Retirement
Once you know your desired results, setting goals becomes much more straightforward.
Be disciplined when spending and adhere to a budget plan
Budgeting can be one of the best ways to stay on top of your finances; by tracking income and expenses, you can make informed decisions about where to allocate resources. But even an impeccable plan may quickly go obsolete if not adhered to strictly.
- Schedule time each month to review and adjust your budget as necessary. By automating your finances, you’ll avoid the temptation to overspend while increasing available funds for reaching financial goals more quickly.
- If your spending exceeds what your income allows, it might be time to assess and reevaluate your budget to make some necessary modifications.
- Although indulging in impulse purchases like new cars, jewelry, and gadgets can be tempting, it may quickly derail even the best-planned budgets! Avoid impulse buys; impulse purchases often turn out more costly in the end than planned spending will.
- Various personal finance apps and spreadsheets can help track your progress, or you could consult an adviser such as a financial planner or budget coach if sticking with a budget becomes challenging for you.
- So start working towards your financial professional goals to set yourself on the road towards a prosperous future!
