How to achieve your financial goals – get out of debt, save money and live the life you want
“Do not save what is left after spending, but spend what is left after saving.” If that wisdom works for Warren Buffet, then it can also work for us. Setting financial goals gives your money purpose. Without them, you may find your money simply floating between accounts or worse, going towards unnecessary purchases. Learning how to achieve financial goals allows your money to make progress towards transforming your life, letting you sit back knowing that your finances are working for you.
What are your financial goals?
Financial goals can come in all different shapes and sizes depending on what’s important to you. As long as you’re moving forward, there are no wrong answers; you could be saving for a house, a holiday, paying off debt or even refurnishing your home.
You can start saving before you know what your goals are but it’s so much easier (and rewarding) if you know what you’re building towards. That’s why you first need to…
Visualise what you want
Where do you picture yourself in five, 10, 15 and 20 years? Creating a vision board can help you to lay out your financial goals in front of you.
It’s easy to become overwhelmed when you have so many thoughts floating around in your mind. Taking them out of your mind and creating a visual display will provide clarity, allowing you to consider your next steps.
Keep your vision board somewhere you can see it every day: on the fridge, in your office or (if it’s small enough) taped to your bedside table.
How to create financial goals
Now that you have your financial goals visualised, the next step is to work out how to create financial goals. Regardless of what your goals may be, they won’t come to fruition if you don’t have a plan in place.
Many budgeters who fail to achieve their financial goals fall short when they try to achieve them all at once. Listing your top five goals and breaking them down into short-, medium- and long-term categories brings a method to the madness.
Short-term goals are those that can be achieved within the next 12 months. These are your small purchases or quick holidays, generally anything that is achievable in the immediate future.
Another key short-term goal is to establish an emergency fund to be set aside for when something unexpected happens (more on this further down).
Medium-term goals are generally those that can be achieved within the next five years.
Here are a few medium-term goal examples to consider:
Your medium-term goals help to lay down the foundations for your long-term goals, setting you up for success and the life you want.
Long-term goals consider your long-term future. These can be any goals after you have laid down the foundations from your medium-term goals.
As a result, long-term goals can be paying off your mortgage, children’s long-term education, investments and saving for retirement.
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How to achieve your financial goals?
Keep your eyes on the prize. This is where our vision board comes in handy as it will work to keep you on the right track.
Once you have your totals and timeframes worked out, it then comes down to your approach. You can either tackle your goals one at a time or all at once and when one is finished, spread those funds across your remaining goals.
Good things come to those who wait
If achieving your goals is taking longer than you’d expected, try to do something goal-minded every day. Say no to takeout or ride a bike instead of taking the car – these suggestions will benefit your health as well as your wallet.
If your goals still appear out of reach, consider other means to speed up the process. Reduce some of those luxury expenses or even consider starting a side hustle. There are plenty of ways to earn a little extra cash on the side online or by being savvy.
According to Canva, as of March 2021, freelance online content creation (and anything that falls under this category, e.g. proofreading & editing, video editing, web design, etc.) has seen a considerable rise in popularity. Data is commonly pulled from popular freelancing websites (such as Fiverr and Upwork) and demonstrates an increased demand for online work that can be undertaken in the comfort of your own home.
Out of sight, out of mind, right? Getting paid in one lump sum may feel nice at first, until you remember all of the bills and required expenses that it goes towards. After all of these commitments are taken care of, this is where your opportunity to save begins.
Consider speaking to your work’s payroll and having a certain percentage of your pay transferred directly to a savings account. This way, you can ensure that your savings are being built automatically behind the scenes.
Expect the unexpected
It’s easy to grow disheartened when things don’t go exactly as planned. Surprises will come up and accounting for these will take the ‘un’ out of ‘unexpected’. You can account for these with an emergency fund, i.e. a little nest-egg that doesn’t get touched unless absolutely necessary.
If temptation may compel you to dip into this fund from time to time for less than emergency reasons, perhaps consider placing this money into an account that requires more steps to access. Speak with your bank to learn more.
Wanting to get serious about how to achieve your financial goals? MyBudget can help you on your journey. For a free appointment, give us a call on 1300 300 922 or enquire online.