There is no better time for financial goal setting than at the start of a new year. Financial goals allow you to create a plan, track your progress, and hold yourself accountable.
Financial goals may be just what you need to help you achieve a stable and enjoyable lifestyle. Now that 2021 is near, it is a good idea to now consider your future financial goals. Instead of trying to tackle your goals at one time, focus on a few each quarter. Here are some financial goal-setting ideas to help you get started:
A budget is a spending plan based on your income and expenses that helps you save for the future and ensure your bills are paid. There is a variety of budget options out there, such as:
Having debt makes it difficult for you to save for a house, help your children pay for college, or meet your other long-term financial goals. Focus on paying the debt off so that you can keep more of your hard-earned money in your pocket. Here are some strategies to reduce your debt:
An emergency fund prepares you for when unexpected car repairs, medical bills, or other expenses come up. Most experts recommend saving three to six month’s-worth of your regular payments. Keep your emergency fund in high-yield savings account that you can access at any time
The sooner you begin to save for retirement, compound interest can work to your advantage when you participate in your employer-sponsored retirement plan. If your job does not offer any retirement savings options or are self-employed, consult your financial professional for options appropriate to your situation.
While budgeting and saving are essential, earning more can help you achieve your financial goals more quickly. With more money in the bank, you can pay off your debt faster or start your retirement savings sooner. To increase your income, negotiate a raise at your job, pick up a side gig, or sell items that you no longer want or need.
When it comes to financial success, knowledge is power. Take the time to educate yourself by meeting with a financial professional, read personal finance articles, or take courses on topics such as saving for retirement, investing, and buying a house.
If you see a home in your future, start a down payment fund. While conventional mortgages typically require a down payment of 20%, you may be able to buy a house for much less. This is particularly true if you opt for a government-backed loan like an FHA, VHA, or other loan programs in your area. Remember that the more you have for a down payment, the lower your monthly payments will be and the faster you pay off your house.
In addition, many people graduate from college with astronomical amounts of debt. If you would like to minimize your child’s debt burden, start to save for their college education. A 529 plan, Coverdell Education Savings Account, Roth IRA, CD, or whole life insurance can help you achieve this goal.
Financial goal setting takes a great deal of time, energy, and specialized knowledge.
Disclosure: This information is provided as general information and is not intended to be specific financial guidance. The source used to prepare this material is believed to be true, accurate, and reliable, but is not guaranteed. SW 1414319-1120-b
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