Have you ever thought about why you're always broke? No matter how much you earn, you're still out of money at the end of each month, and your account is always empty by the end of each year, so whenever you need cash in any emergency, you must get a loan.
Well, this situation is the result of not paying attention to achieving your personal financial goals. Want freedom, relief of mind, or just want to achieve a goal that costs money? You must pay attention to creating and achieving personal finance goals.
In this blog post, I'm going to show you an easy way to build and achieve financial goals.
Short-Term vs. Long-Term Goals:
Short-Term Goals:
If you have a hard time sticking to a budget and achieving a big financial goal by consistently saving money, you should start by creating short-term goals and then achieve them.
As the name shows, short-term goals are small goals that you can achieve within one month to 1 year.
#1- Building an emergency fund equivalent to three months' living expenses.
Wise people always save a 6-month emergency fund so that if they, unfortunately, lose their job or their assets, they can still continue the same lifestyle until they get a new job.
But if you're new to achieving financial goals, you should consider building an emergency fund of three months. If you spend $1000 monthly, you must save $3000 as an emergency fund for three months.
The best way is to have a consistent budget which splits your money into three parts;
- 50% on Needs
- 30% on Wants
- 20% for Savings
It's called the 50-30-20 budget rule. It's the easiest way to stick to a budget if you've never practiced budgeting.
#2- Paying off a credit card balance.
To avoid interest, you must consider paying off your credit balance. First, you should try to stop using credit cards for your daily life purchases. Use a wallet as you can count your money while you spend, and you can stop overspending.
#3- Saving for a vacation.
Vacations are the best way to improve your well-being. But most of the time, people avoid vacations because they cost them more than they earn.
So, plan a vacation or a trip for a week or two, and start saving money for it before 5-6 months. So that you won't feel any burden and still you can enjoy the vacation.
#4- Starting a side hustle to increase income
Side Hustle can be both small and large; it depends on your chosen business. If you are just starting, I would suggest going for a small hustle.
Choose your niche, do some research, and start saving money for it. As all businesses demand some investment, you'll have a proper goal to save money for the investment. And your most significant motivation will be to increase your income.
Whenever you save a cent, you'll have that thing in mind that from this side hustle you're going to earn more than you invest.
Long-Term Goals
Long-term financial goals need a saving of more than a year or more. You can make a goal to save an amount each month for your retirement or meet a significant need such as buying a house or a car so that you can easily travel and save on public transport costs.
#1- Saving for retirement
Everyone wants to retire as early as possible. But most people can't even make a proper living at the age of 50 because they haven't saved anything for their retirement.
You don't want that, right? So, in order to save money per month, you must make a long-term goal that keeps you motivated to save an amount no matter what. The goal should be to save money for your retirement.
#2- Buying a House
If you're paying monthly rent and want to buy a house for yourself, but you can't afford it right now, you must think about saving money for your house.
Save as much as possible, and one day, you'll have enough money to buy your dream house. Start by saving a little money and then increase it with time.
#3- Investing in higher education
If you want to study more and become a highly qualified person from a prestigious university, you must think about starting to save money right now.
Put less than half of your income or pocket money into your savings envelope and repeat it every month until you save enough to meet your university or college expenses.
#4- Building a robust investment portfolio
You might have heard this famous saying about not putting all the eggs in one basket. The same saying goes for investment. If you put all your investments in one type of asset, for example, stocks, you're at a high 24/7 risk of losing that money.
So, to minimize the risk, it is always advised to invest in different types of investments such as stocks, real estate, etc. Don't go for only one option. But to build that robust investment portfolio, you must need money. Where are you going to get that money? Through the savings that you'll be making each month,
Finding Motivation
#1- Visualize Success
When all the goals and the results are in front of you, you get motivated. So, to not lose that motivation, you must create a vision board and start counting your small steps and victories.
And start visualizing that one day you're going to achieve that goal no matter what. But the most important thing is you must enjoy the process that brings success.
#2- Break Goals Down
Not everyone has enough motivation or resources to start saving a lot of money for months. So, to make your goal look more achievable, you must consider breaking down your bigger goal.
For example, if you want to save $1000 per month, you must start by saving $100 each month or even a smaller figure. So that you will stay calm and succeed at saving even a penny.
#3- Seek Accountability
If you're okay telling your goals to someone, then consider telling it to any of your loved ones who can visualize your growth and can hold you accountable, plus give you the motivation to be on track.
You can also get help from a personal finance mentor. If not, then consider becoming your own best friend and track your progress on your own.
#4- Educate Yourself
Achieving personal finance goals may sound very simple, but they require much knowledge. So, you must consider watching videos and podcasts that teach personal finance and strategies to save money efficiently, or you can read money-making and saving books.
Go for the free options at first and then start investing in yourself to get educated about money saving.
#5- Track Progress
The best method to get motivated is to check your expenses regularly. Frugal living demands tracking your expenses on a regular basis.
So, if you're determined to save money for your goals, you must start living frugally; for that, you must create a budget and stick to it. Next, you need to track your spending on a weekly or daily basis and avoid impulse buying.
Conclusion
A person with no goals can't get that healthy dopamine that a person gets at achieving his goals. So, make your goals and start saving money to accomplish them. Start by creating short-term goals and then switch towards long-term goals.
