Being able to meet financial goals can make you feel good about yourself. In truth, any goal that you can meet will make you feel accomplished. That sense of accomplishment is actually a good thing. It motivates you to do more positive things.
In fact, this habit is something that Millennials have started to adapt. According to a survey, 87% of Millennials do not only have financial goals – they also have made some progress in reaching it. Despite the fact that they started their career while the economy was at its bleakest because of the Great Depression, they seem to have their priorities straight. The intention is clear whenever they set their financial goals. It is an indication that they want to improve their current financial situation.
Of course, setting financial goals is one thing. The most important part if your ability to meet financial goals. As we approach 2017, you need to start revisiting the goals that you have set at the beginning of the year.
Importance of meeting money goals
There are several reasons why you need to meet the financial goals that you have set for yourself.
As mentioned, these goals are a reflection of what you want to happen in the future. That means having financial goals is just like having a financial plan. You are thinking about the future and the various improvements that you want it to have. That is a good sign because it will help give your decisions some direction. It will be less likely that you will make a mistake.
Having a goal will also give you a clear purpose that will identify what you need to change and improve. At least, this will be revealed to you as you are setting the goal. With that clarity comes your ability to be more decisive about your finances.
You will also be encouraged to practice the right financial habits. At least if you want to reach your goals. You will have more motivation to keep yourself in line so you can be successful in improving your financial position. With the practice you are getting when it comes to implementing the right financial habits, you will soon come out with better money management skills.
Of course, having the goal is not enough. You need to meet financial goals too. That is how you can really benefit from them. But then again, that is easier said than done.
Tips to reach your financial goals
- Make sure the goal is meaningful. Most of the time, it will be hard to reach a goal. It will take a lot of effort. But if it is something important to you, then you will find a way to make sure you can overcome the obstacles.
- Put it in writing. Another technique to meet financial goals is to write it down. When you do, it becomes more real – at least compared to just having it in your head. It will also give you something to revisit as you progress through the goals.
- Keep your goals visible. Apart from writing it, you might want to set up a visual representation of your goal. It can be a photo that will remind you of what you are trying to reach.
- Define the smaller steps. Some goals are too big that it becomes overwhelming. Try to identify the smaller steps that will lead you to the big one. This will make the goal more attainable.
Use these tips to help you meet financial goals – if possible before the end of this year.
Two of the most common financial goals
According to statistics, the top two financial goals are to save more (50%) and pay down debt (28%). Most likely, this is also something that is included in your list of goals for this year. If so, here are tips that will help you increase your savings and pay off your debts.
This seems to be the most popular financial goal among Americans. We have learned our lesson when it comes to saving for the future. While we know how important it is, that does not mean some of us do not struggle with saving habits. To make it easier to save money, here are some tips that you can follow.
- Set up an automatic payment. This means the set amount that you have for your savings will automatically be transferred into your chosen savings account.
- Identify specific saving goals. This will motivate you to save because you know the reward that you will get if you succeed in meeting your saving targets. For instance, if it is a vacation or a down payment for the house – these have concrete results that will motivate you to keep on saving money.
- Take advantage of freebies. This will lower your expenses and in effect, allow you to save more. Sometimes, your company has benefits that you can tap into – like matching your retirement contributions. You have to make sure you do not waste these opportunities.
- Use windfall money wisely. If you get unexpected bonuses or monetary gifts, do not spend them on unnecessary things. You can take a portion and reward yourself. However, make sure most of it will go to your savings.
Paying off debt
According to statistics, those with debts have a hard time meeting their financial goals. This is one of the reasons why you need to focus on your debts too. If you want to pay a significant portion of your debt by the end of the year, here are some tips that will help you accomplish this goal.
- List your debt according to priority. This will help you identify what your debts are. If your finances cannot cover all the payments, you need to choose the priority debts. These should be the ones that you need to pay first.
- Meet more than the minimum. At least, this is true for your credit card debts. If you stick to the minimum payment requirement, it will take you a very long time to pay off your balance. You need to pay more than the minimum – especially for those with high interest rates.
- Try to cut back on expenses. This will help increase your payment fund to enable you to pay more towards your debt. This allows you to significantly reduce your balance.
- Keep a lid on your debt. While you are paying off your current debts, you have to keep yourself from adding more to what you owe. This will keep you from paying off your debt if you keep on borrowing more – especially if you are borrowing more than what you can pay for.
- Analyze your expenses. Sometimes, people just fail to realize that they are spending more than their income. If this is the case, then you will really incur debt. Unless you address your overspending issues, you will have a hard time getting debt free.
There is an ongoing debate whether saving or paying off debt is more important. If you have extra money, where should you place it? That actually depends on you. If the interest rate on your debt is bigger, then you might want to prioritize that. But if you will use the savings to invest in something that has a bigger rate, then it might be better to save it so you can place it in an investment.
Tips to meet your financial goals
Here are more tips that will help you meet financial goals.
- Create a budget. It is very important for you to create a budget that will help keep you from overspending. This will keep you from making a lot of financial mistakes – like overspending or failing to save money.
- Know that it is okay to make mistakes. If you have slip-ups, that is okay. You need to let it go and keep the disappointment from planting discouragement into your mind. That will keep you from striving harder to meet financial goals.
- Set realistic goals. If you are having a hard time, it might be best to check if the goal is realistic or not. Maybe you have set a really hard goal, to begin with. Keep it small if you know that your finances are tight. A small improvement is better than setting yourself up so high – only to be disappointed.
- Review your progress every now and then. Finally, you have to keep on tracking how far you have come when it comes to reaching your goals. If you are slipping, you need to figure out how to bring yourself back on track.