We’ve outlined four realistic financial goals that can help improve your financial health, as well as strategies you can use to help achieve these goals. Not all of these goals may apply to you right now, but achieving even one is a great start.
1) Reduce debt
Many Americans struggle with having debt from credit cards, mortgages, cars, and student loans. It is a good idea to aim to pay off all of your debt, but it is also a challenging objective to accomplish. Simplify your objectives by dividing them into: Consider your debt and choose a reduction goal in terms of a percentage. You can reduce your debt in a more practical way if you make a resolution to pay off 5, 7, or 10% of it.
Be smart about how you pay off debt as well. Choose the best strategy to attain your objectives because not all debt is created equal.
2) Make it easy to save
There's a chance you won't reach your savings goal if you set one to save a lot of money in a short length of time. Long-term financial goals can be challenging to reach, and you might need to put your savings on hold if you have a few months of unanticipated spending. You could think that choosing not to save was a mistake.
Set more defined, more manageable, short-term (or seasonal) goals for yourself. Perhaps you want a new smartphone, wish to travel, or have your eye on a Christmas present. When you accomplish smaller, more immediate goals, you may get a psychological high.
Tip: Pay yourself first by setting up automatic transfers from your checking account to your savings account or having some of your paycheck directly deposited into savings.
3) Maintain a spending log
You're not alone if the thought of creating and sticking to a budget seems a little daunting. According to a report released by the National Foundation for Credit Counseling on March 13, 2018, only 41% of U.S. people create and follow a budget. You can decide to track your expenditures to obtain a better understanding of where your money is going each month rather than starting with the creation of a comprehensive budget.
Technology can assist you if keeping track of your daily and monthly revenues and expenses proves to be a challenge. Apps provide ways to keep track of your expenditure and spot places where you may reduce back, in addition to mobile and online banking.
4) Spend money on yourself
Saving money for retirement is a challenge for many Americans. According to a Transamerica analysis from June 2018, the median retirement savings of Baby Boomers is $164,000, which will only support a modest quality of living in retirement even with Social Security and other sources of income. As soon as you can, begin saving for retirement so that your funds have more time to potentially increase. Consider it a financial investment in your future self.
Check your retirement plans to discover if you're making the most of your resources. Can you increase your 401(k) contributions at work? Have you given IRAs any thought? Recall that tax benefits are frequently provided by retirement programmes.
Never absolve yourself of responsibility.
Setting goals is crucial, but maintaining new behaviours is difficult. Set a reminder on your calendar to check in on your goals every month to help hold yourself accountable. If you're having trouble, consider coming up with an alternative strategy. Start off modestly and look for opportunities to gradually expand your funds. You will be able to create enduring habits that direct positive improvements in your financial life with the correct planning and purpose.
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