Everyone has financial goals that they hope to achieve in life. Some are grander than others, of course, but it doesn’t make any of them less real, meaningful or important to those who hold them. Trying to help lawyers achieve their financial goals, for example, might mean helping them build up their own practice to the point where they’re making millions, buying a huge house and a sports car. At the same time, helping a young blue-collar professional reach their goals might just mean helping them buy their first home.
Different people have different goals, but the principles that help you reach them are essentially the same:
Get Sound Financial Advice and Planning Help
You might have assumed that getting a financial advisor would cost you too much money, but this simply isn’t true. Getting the right advice means getting a clear roadmap to greater financial security and independence, and it’s when you have that map that things start to happen. Financial planning with the help of an advisor creates realistic and achievable goals (see below), and gives you definite targets to hit, which helps you understand better if you’re succeeding or failing at this financial management thing.
Keep Goals Specific and Realistic
If your idea is to become a millionaire in the next 12 months, then most likely you are dreaming. Just as with most life-changing decisions, you won’t get to where you want to be without specific and realistic goals. For example, those wanting to lose weight can’t expect to lose 40kg in a month, or even 6 months. They might set themselves the goal of losing 0.5kg to 1kg per week, a sustainable, realistic and achievable degree of loss.
The same is true for your financial goals. Saying that you want to generate an extra $500 in savings each month, for instance, works in many cases. Making a goal to have enough money for a downpayment on a house within 5 years is another realistic goal. These are also specific and well-defined. Get the combination of specificity and realism right, and you’ll have a clear map to success.
Start as Early as Possible (But It’s Never Truly Too Late)
While it’s never really too late to start saving and planning for the future, it’s always best to start as early as possible. When you start setting money aside in your 20s, for instance, you can build a bigger pot and take bigger risks with your money that potentially will yield greater rewards, with time to restart should things go awry.
Alternatively, starting young also means that you have time to steer clear of risk altogether, investing your money in schemes that yield small amounts in the short term, but are stable and produce much larger amounts of return in the long run.
Wage War on Bad Debt
If you want to achieve your other financial goals like owning a home, starting a business and whatnot, then you have to work to eliminate bad debt from your life as much as possible. This includes credit and store card debt, unpaid bills, car loans, and payday loans. Clearing these high-interest debts leaves you with more money to use for “good debt” acquisition such as a mortgage.
Create Budgets and Stick to Them
Finally, you’ll do far better achieving your financial goals if you create budgets for your living costs and other expenses and then stick to them. This ensures that you’re always living within your means, and always allowing room for money to be saved and stored away for use on more worthwhile financial pursuits.