One of the targets you might have for the year is to reach your money goals and aim to strengthen your finances. It can be to help you pay off your debt obligations which can vary depending on what age you are in. For people who just graduated from college or post-graduate studies, their main concern would be paying down student loans.
Forbes shares that the student loan for 2019 has reached $1.5 trillion shared by about 45 million borrowers. This is a big amount that takes precedence for the younger generation and would comprise most of their money goals for the year. At the very least, their financial targets would revolve around making sure that they get to pay off a considerable amount off their student loans.
Your financial targets for the year might also be about saving for a house downpayment. You can reach your money goals if you know what you are saving for in the first place. Looking at a mortgage loan might mean you are thinking of settling down in one place or even starting your own family. Saving for at least 20% downpayment on a house helps you save money by not paying for a Private Mortgage Insurance or PMI.
Your goal for the year might also be to focus on your retirement fund especially if you are just a few years away from it. It could be maxing out your 401k to take advantage of an employer matching contribution or tweaking investments to help you ease out of biog risks and ensure your capital is intact for when you need it in retirement. You can have multiple goals for the year and there are a few things that can help you reach them.
Clear goal setting
If you want to reach your money goals for the year, you have to start with a clear-cut target for the year. This is a crucial first step if you are serious about reaching your goals. You need to make sure that you are dialed in when it comes to the target you aim for. Without it, you run the risk of spreading yourself out too thin with multiple goals without ever reaching anything at the end of the year.
If you are coming out and graduating from college with a huge student loan under your name, then you can focus on that goal. Audit all your student loans and lenders both private and federal types and list them down. Once you have an idea of how much exactly it is you are dealing with, find a way to pay them off within a certain time period. Having the end in sight is important when making a repayment plan.
If you skip this process and just convince yourself that you will do your best in the next 12 months, that is not a plan. That is only a dream where you hope to reach your goal. Once you attach a specific date into it, you are working towards a goal with a timeline. This pushes you to do more and achieve every step within the timeframe.
Reach your money goals with a reliable budget
You would need a lot of financial tools at your disposal if you want to reach your financial targets and one of them is your budget. It is imperative that you have a comprehensive household budget to help you manage your finances for the year. You need this to ensure that you are always on top of your money and that you can make informed financial decisions at any given time.
When you are putting your budget together, you need to focus on two items in your finances. The first one is your income. You need to make sure that you are able to account for all the sources of your income. This could be a little easier if you are only focused on your day job. However, getting a side gig nowadays has been the norm and the income you earn from that needs to be added to your budget.
You also need to keep a close eye on your expenses from the smallest purchases you make all the way to the big-ticket items. Do not forget to include recurring payments you make on a monthly basis. Once you have all these details, make sure that your income is more than enough to pay for all your expenses. If not, you need to start making changes in your budget to help you cover your expenses and more.
Stick to your budget
It might sound redundant but creating a budget and sticking to it are two different things. This is because there are people who create a budget but choose to just ignore it over time. They feel that they already have a sense of what they need to do and just wing it. Not only does this put your budget in peril but it also your other savings as well.
If you create a budget, the best thing to do it follow it and not leave it at home when you need it. Just like when you go out and do the groceries for the house. If you spent time making sure you write down everything you lack at home, it lowers the chances of buying anything in excess. Once you address this issue, you get to save money and redirect it to other areas of need.
Sticking to your budget also increases your chances of being able to reach your money goals. If you commit to what you have already planned in the first place, you are able to take positive steps towards your goal. You can save money as scheduled, lower expenses as planned, or even grow your side hustle as you laid it out. All these are possible if you stick to your budget.
Be ready to fail
To reach your money goals means to take on a journey and there will be pitfalls along the way. Do not be afraid to make mistakes and fail along the way. It is a natural part of the process and the way you move forward from it will dictate if you will be successful or not. If you choose to just sit back and let your mistake run all over you and your finances, you lose.
However, if you decide to move forward with the lesson it has taught you, this can give you the edge you need in the future. If a similar situation occurs, you already have an idea of how to proceed. You prevent making the same mistake twice. Absorb the lessons that failures teach you and think of them as stepping stones to help you achieve your money goals for the year. Forbes shares that this can give you valuable wisdom that can help you in the future.
Seek help if you need it
There could be times when the challenge ahead is overwhelming and would seem to be a big hurdle for you. Remember that there is no shame in asking for help especially when you really need it. It can be people in your family asking if they can help you budget better. It is also possible that you reach out to finance professionals. They can help you in a number of ways from exploring debt repayment plans or even choosing the best investment portfolio for you.
There are a number of ways to help you reach your money goals for the year but the most important thing is to always move forward. If you see a hurdle, do not stop on your tracks waiting for that bump in the road to go away. You need to make the appropriate adjustments so you can go through the problem towards your goal.