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financial goals and setting a realistic financial goals should be part of our life setting because it is virtually the key to achieving our financial success. However, knowing which goals to prioritize and how to reach them can be difficult. The reason may be that we’re bad at setting reasonable expectations.
Whether you decide on a money-related goal because of a life event, such as having a baby or buying a house, or just to improve your financial health, it’s important to consider your priorities and make sure your financial goals are specific and achievable.
We’ve mentioned some realistic financial goals that can help improve your financial health, as well as strategies you can use to help achieve these goals. Note that all of these goals may not apply to your financial status at once, but achieving even one is a great start.
What are financial goals?
Financial goals are the personal, big-picture objectives you set for how you’ll save and spend money. They can be things you hope to achieve in the short term or further down the road. Either way, it’s often easier to reach your goals if you identify them in advance.
How To Set a Realistic Financial Goals
1. Build on your initial success
Once you’ve taken the above small steps, you can start to make more ambitious plans for the medium to long-term. This can involve bigger financial objectives, like paying down your mortgage faster, setting targets on your superannuation nest egg, or building a diverse investment portfolio.
But remember, if you have financial goals you want to achieve, you don’t need to go it alone. Have you thought about getting expert advice to get you up and running? The team at Bridges can help you take a structured approach to examining your lifestyle priorities and investment preferences.
2. Make savings simple
If you set a goal to save a big amount in a certain time period, there’s a chance you’ll fall short. Financial goals that are many months away can be harder to achieve, and if you have a month or two with unexpected expenses, you may have to pause your savings effort. That decision not to save might seem like a setback.
Instead, give yourself specific, smaller, short-term (or seasonal) goals. Maybe you want a new smartphone, would like to take a trip somewhere or have your eye on a holiday gift. Setting smaller, short-term goals can give you a psychological boost when you reach them. If a big-ticket item is the ultimate goal, consider setting certain benchmarks along the way so you can achieve this same effect while still taking longer to save.
3. Track your spending
If the idea of setting and maintaining a budget sounds a bit overwhelming, you’re not alone. Just 41 percent of adults establish and maintain a budget, according to a March 13, 2018 survey conducted by the National Foundation for Credit Counseling. Rather than starting with creating an entire budget, you might choose to track your spending so you have a better sense of where your money is going each month.
If monitoring your spending by tracking monthly expenses and daily receipts seems difficult, technology can help. Apps, along with mobile and online banking, offer solutions for tracking your spending and identifying areas where you can make cuts.
4. Don’t let yourself off the hook
Setting goals is important, but sticking to new behaviors is tough. To help hold yourself accountable, set an alert on your calendar to check in on your goals each month. If you’re struggling, try thinking of another way you might be able to reach your goal. You might start smaller and look for ways to increase your savings amount over time. With the right planning and purpose, you will be able to build lasting habits that guide positive changes in your financial life.
5. Pay down debt
Owning money on credit cards, mortgages, vehicles and student loans is a reality many people contend with. While trying to pay off all of your debt is a reasonable idea, it is also a difficult goal to reach. Simplify your goals by breaking them down: Look at your debt and decide on a percentage you’d like to shrink it by. Resolving to eliminate 5, 7 or 10 percent of your debt gives you a more realistic way to approach reducing what you owe.
In addition, be savvy about the way you pay down debt. Not all debt is created equal, so determine the right approach to achieve your goals. For example, you likely want to pay down high-interest debt first and focus on other debt later.
6. Invest in yourself
Many people are struggling to save for retirement. It is high time you start saving for retirement as soon as possible, so your money has more time to potentially grow. Think of it as investing in your future self.
7. Be specific about your goals
First up, work out what will motivate you. Be specific – specific enough that you can visualise what you’re aiming for. Where do you want to live? Which of your debts will you tackle first? What does your ideal lifestyle look like? Which specific aspect of your finances do you want to understand and manage better?
Whether your answers to these questions are humble or huge, be clear about them, rather than getting caught in the trap of just making vague wishes like “having more money to do what I want”.
8.Try to build positivity with quick wins
Even if you’re aiming big, it often helps to start small. The important thing is to start somewhere. What are the things you can achieve relatively quickly to build momentum and confidence? It might be going hard on paying off your credit card balances, or starting to regularly put a modest amount into a savings account that’s earmarked purely for a future goal. Pick an achievable starting point, then go for it.
The Best Way To Set Financial Goals
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