5 Ways to help you with your Financial Goals
We all have financial dreams.We'd love to be totally free of debt. We'd love to take an early retirement. We'd love to live in a dream home that we truly own. We'd love to pay for our children's education at the best schools. We'd love to operate our own business.
The challenging part of all these is the transformation of dreams into goals. Think about it: your dreams seem to be a giant ball of wishful thinking - and you're trying to make it real within a specific timeline. It's not easy, even for the people who are used to achieving their goals.
But no matter what your specific goalsare, these steps can drastically improve your chances of succeeding:
1. Devise a detailed yet flexible plan
First, ask yourself: How exactly am I going to get from where I'm currently at, to where I want to be? What is my timeframe to achieve that goal? What should I achieve in a month's time to know that I am on the right track? Your plan to achieving your goal must answer these questions clearly. At the same time, it should be flexible, as no one can tell what could happen in the future, which may affect the achievement of your goals.
While drafting your plan, ensure that it doesn't fall apart if you have struggles in achieving the steps you outlined. Your plan should include fallbacks and safety nets in case these things happen.
2. Add a good dose of reality to your plan
How do you make your plan flexible? Be recognizing that this plan is to be executed in the real world.
More often than not, people devisefinancial goals that are grand, but unachievable if we consider what their current lifestyle is. A person who is living from one paycheck to another would probably not be a millionaire within the same year.
Thus, you should look at what you can actually and realistically pull off. If you want to be debt-free within the next two years, then try to pay off around 5% of your balance every month. If the goal does not seem to be realistic for the short term, then all the more will it be unachievable for the long term.
3. Set your milestones
As a matter of fact, focusing on shorter, smaller timeframes is a very powerful way to reaching your financial goals.
For example, your goal is to save up $50,000 to start your business. Instead of setting such a large amount as your goal, break it down into smaller amounts - milestones that will let you know that you are doing well and are one step closer to your final goal. If you need to raise that money in 5 years, then your goal is to make $10,000this year.This translates to $800 per month, and $175 for the week.
When you break down your goals into smaller pieces with milestones, the actions you need to take day by day to achieve those goals become clearer. It's also easier to think of ways on how to save up $175 this week instead of thinking about $50,000 for the next five years.
4. Automate your transactions
Now that you have your goal broken down into smaller milestones, you should automate the entire plan. Start by setting up an automatic transfer at your bank that easily deposits $175 per week to your savings account.
Automation serves two purposes. First, it inches you closer towards your goal without having to make any active decisions that could stop it from happening. Second, is that it puts you in a position where you can focus on dealing with your expenses now that you've made room for your goal.
5. Keep your savings out of your reach
When you are aware that you have a savings account, it is very tempting to withdraw the money if the 'need' arises. Hence, make sure that you have no immediate access to it - such as ATMs or debit cards, because you can perform cashless transactions with them and won't only deplete your resources, but set your goal back for days or even months.
Therefore, an ideal step is to save your money in a financial institution that is rather far from you. Your savings for your goal should not be sitting in a place where you can grab it and go.
If executed well, these steps can indeed guide you to achieving any financial goal you have in mind. And all that's needed is your dream and your commitment.