Do you sometimes wonder where you’re going with your life, financially speaking? You might have vague goals and fantasies but are you making the right decisions for them to become a reality? It’s time you took control and turned your financial dreams into goals you can easily achieve. Here are a few tips to get you started.
Be clear with what you want. What do you want to achieve? Do you want to start building an emergency fund? Do you want to save up for your child’s college education? Do you want to pay off all your debt? Do you want to save up for retirement? Whatever your plans, it’s best to set tangible aims and to keep your expectations realistic. If you have big goals like setting up a college fund or retirement fund, list down smaller goals which you need to accomplish to get there. Doing so will make it easier for you to work your way into achieving your ends. In planning for your financial future, it’s also best to be flexible because you never know when life changes, however minor, can affect your plans.
Establish a time frame. Now that you know what you hope to achieve, set a deadline. When do you want your emergency fund to be ready – in three weeks or in three months? How long do you plan on saving up for your child’s college education – 10 or 15 years? How long do you want your investment to grow before cashing them out – a year, five years, or 10 years? Knowing your time frame allows you to determine how much money you have to set aside as well as how often you will need to contribute to your fund. Will you need to set aside money every week, after every paycheck, or every month? Having a definite timeframe will also make it easier to track your progress.
Take the necessary action. Design a strategy. Figure out an amount you feel comfortable working with to fund your financial goals. Determine how much of your paycheck will be set aside and create a habit. Break down your goal into small, day-to-day actions which will contribute to your overarching, long-term goal. It’s easier to commit to P500 every paycheck than P20,000 every year.
Monitor your progress. Regularly review your progress. Set up milestones. Are you meeting your weekly or monthly goals? If so, pat yourself on the back and reward yourself (but don’t overindulge). If not, find out other ways on how you can free up more money for your savings or fund. Check your budget to see where you can cut some expenses. If you’re really determined to reach your goals ahead of time, take any extra amount you receive, from bonuses or tax refunds, and add these to your fund.
What are your financial goals? Are you any closer to reaching them? Share your thoughts with us in the comments.