How to set goals to be financially successful

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Financial success can be defined in different ways. Some people might consider it the ability to purchase luxurious items, while others might simply prioritize having enough money to comfortably live on. Thinking about where you want to be in the future will help you set realistic goals that accurately reflect your desires.

Focus on debt

Debt can put a strain on any budget, no matter your income level, so it’s important to focus on paying it down before prioritizing anything else. If you have debt from school, you may consider refinancing with a new loan to lower monthly expenses. Having Earnest student loan refinancing available comes with several benefits, such as getting payment terms that work better for you. You’ll also want to focus on any debt that has a high-interest rate, like credit card debt. First, make sure you avoid getting further into debt. Then work with your lender to create a repayment plan to attack the principal, not just the monthly interest.

Be inspired

It is important to think about the things you would like to do, but you also need to consider why you are doing them. By considering why you are doing these things, you can help yourself be more motivated and put things into perspective. Maybe you want to have an emergency fund so you won’t feel as stressed about a potential job loss. Or you might want to make the debt more manageable so you have the freedom to go on a vacation.

Examining your situation

You may find you have more than one goal in mind, so it’s a good idea to prioritize the most important ones. Look at where you are at right now when deciding on your goals. You can sort them by long-term and short-term. Take some time to go over your income, net worth, budget, and taxes. Understanding each of these aspects will allow you to identify and prioritize goals. You will also want to consider long-term goals, such as saving for retirement. A retirement plan can be one of the biggest contributors to wealth and you should consider it in your plans. Even if it is still years away, starting to save now can give you enough to live on when it is time to retire. It’s a good idea to save around 10 to 15 percent of your annual income, especially if you receive a match on contributions to a 401(k) account.

Working through your goals

Make sure you have written down any goals you want to set for yourself so you can stay clear on your objectives. Use a notepad, keep a spreadsheet, or do whatever works best for you when it comes to meeting your goals. Track your progress over time, and move on to another goal once you have crossed one-off. Of course, the process should not feel like a chore, or else you may not stick to it. Reward yourself when you complete an objective and make progress. If you have reached an emergency fund goal, you might be able to focus on saving for a vacation. Or you may dedicate a little money to a fun money fund so you can go out to eat or treat yourself to some new clothing.

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