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Almost any successful person set financial goals. The lack of such a purpose and a plan of action forces people to waste time, miss opportunities and always stay depending on the circumstances.
Setting financial goals is necessary for anyone, regardless of their profession or income. What’s more, it doesn’t matter what interests you have. You can set financial goals for different purposes, from saving a sum for gambling at Playamo to earning money to buy a yacht. These simple tips will help you achieve such goals faster.
Set the Right Goal
Correct goal definition is half of success. You surely know that tasks completed step-by-step are almost impossible to fail. With your personal goals, everything is the same.
It is important to learn how to set financial goals correctly. The goal is a measurable and concrete result of the activity. “I want to be rich” is not the best goal because you don’t know the final point. “I want to earn $1,000,000” is much easier to achieve.
There are financial and material goals. For example, “I want to earn $1,000,000” is a financial goal, and “I want to buy a Samsung TV” is a material one. To make a material goal measurable, combine it with a financial one. For example, “I want to buy a Samsung TV for $2,000″.
Setting an exact goal is good, but it is equally essential to define a plan or schedule. Beforehand you should determine the time frame for achieving the goal. Focusing on it, you can find the balance easier.
Create a Schedule
All goals can be divided into 3 types according to the time of their achievement:
- Short-term goals are up to a year.
- Medium-term goals are from 1 to 3-5 years.
- Long-term goals are from 5 to 10-15 years.
Usually, setting goals should be done at the beginning of the year. You should write about what you need to do during the year. You can start by buying traveling tickets for the whole family, to buying school supplies for your child for the new school year. As a result, you should get a list of planned purchases, with a mandatory indication of the amount and timing of their implementation.
So, you will have all the prices. You will only have to plan the money flow correctly and stick to the plan.
Building financial plans for the next 3-5 years is already a more serious stage. This can include the purchase of a new car, apartment, or the accumulation of money for your child’s education. Define what you want to achieve in the next 5 years, transfer it into money and your goals are formed.
The goals here are larger. That’s why it takes more than one year, and possibly several decades, to achieve. Savings for retirement are the most essential here. It is possible to save up for a good sum on your own, but it is a matter of more than one day. Determine the desired amount, taking into account the income, which will bring the accumulated capital during this time. Then calculate how much you need to save so that by retirement the planned amount is available.
The main difficulty of long-term goals is that the planning horizon is too far away. It is impossible to take into account all the moments in the future that will affect the movement towards the goal.
Nothing affects a person’s monetary security and success as a set of financial habits. Start saving from $500 per month, if you decide to achieve financial goals, whatever happens. Try to do the maximum to follow this habit. Soon it will become a real habit.
One more habit which will help you is to buy gifts in advance. Buying gifts just before the holidays, people overpay more than 2 times for the same things bought in advance. The habit of doing everything at the last moment is always expensive. People lose time when they try to finish a project before the deadline, they lose money by buying Christmas gifts on December 24. But it is enough just to make a list of gifts for a year and buy them gradually.
Increase your Financial Literacy
Big money requires respect and the ability to manage it. It is important to pump up your financial intelligence if you don’t want to become a burden for high incomes. Therefore, it is significant to improve your financial culture. Read specialized books, watch educational videos, and find your financial mentor.
Start with Small Steps
Many believe that the financial targets are too large, and the current financial situation simply excludes their implementation. Do not be afraid. Figures and deadlines may seem impressive, but they are exactly what you need. Make sure you do this in person, starting with a few short-term goals. Identify them, set deadlines, plan and see your confidence grow with your progress. As you complete smaller tasks, move on to larger ones.
There is no need to reduce costs all together to achieve financial goals. Prefer quality to the price in the following cases:
- Food. Good nutrition is a guarantee of health and a positive mood. Buy vegetables, fruits, milk and meat. Give up buns, noodles, and cheap semis.
- Mattress. Do not turn your sleep into hell. A good mattress is more expensive, but you will use it for over 25 years.
- Education. The world is rapidly developing. Today you haven’t spent money on courses, and tomorrow you watch your savings melt. Never stop learning. If you can find free courses, choose them. If the situation requires it, pay for your education.
- Medicine. Your health is the most essential thing you have. Never try to avoid buying your medicine, especially if its lack affects your mental health.
After all, financial goals are essential to set, regardless of your interests or preferences. You can start with smaller ones and constantly increase them. So, you will afford everything you need.