While talking about your finances might seem overwhelming, it is a topic that once handled can set your mind at ease. Putting foundations in place will help you to take the steps to achieve your financial goals. It is important to take control of your finances, as implementing changes will save you money in the long run.
Setting financial goals is vital in achieving the big visions and milestones you have for your life. While these goals can range from short to long term, creating a roadmap of how you get there will help you to progress, navigating your way through the smaller goals to achieve your big vision. It is important to track these as you can tick off achievements as you go, fueling you onto what you can accomplish next.
There are three key rules of financial goal setting you should keep in mind, they are:
- Is it Measurable, if you can’t measure it how will you know that you are progressing? What do you need to do, how much do you need to save, to reach your end goal?
- Is it Realistic, while it is important to dream big, it is important to be realistic when setting your goals, to make sure that they are not unattainable. This makes sure that you can tick off goals, keeping the momentum going to avoid getting disheartened.
- Write Your Goals Down, this holds you accountable, gives them life, takes them from ideas to goals.
Keeping the three rules in mind, here are a few tips to help you achieve your financial goals.
Know Your Goals
The first place to start is by sitting down and working out what the goals are that you want to achieve. In order to reach your goals, you must first create and identify them. Figure out what is important to you, putting everything on the table, from the practical and pressing, to the aspirational and futuristic goals.
Think about where you want to be in 10 to 20 years and what you want to have along the way. Do you want to start a family, do you want to buy a house, do you want to start up a business or do you want to plan multiple overseas holidays? Perhaps you want to do all of these and more, by writing your goals down, you can work how to achieve them. Putting them into priority and then putting in a plan to accomplish them.
Evaluate Your Current Financial Position
When evaluating your financial position it is vital to look at your credit report, this contains your credit card score and your credit history. When checking your credit report, you can see if there are any errors on the report. If there are errors, you should fix them immediately.
It is also a good idea to look at your debts and see if they can be paid off earlier. Debts often have high interest, looking to get these paid off earlier will give you more money to spend on other things in the long run.
To set achievable goals it’s important to do an honest evaluation of your assets, liabilities, incomings and outcomings. This will provide you with an accurate starting point. You will be able to see where you are overspending and where you can save some extra money. Look at your bill providers and see if there is a cheaper option, or if there are any deals where you can consolidate and bundle. Look at the rates and fees that you may occur with your bank, as while these can look small, over years they add up.
Choose A Bank That Caters To Your Lifestyle
The bank you choose is vital in achieving your financial goals. Your bank should understand your lifestyle and in turn be able to take a unique approach to help you reach your goals.
With banks offering a multitude of services that can help you achieve your goals from low-interest rates, to budgeting tools, to specialised savings accounts. It’s important to spend the extra time researching to find the bank that works for your lifestyle and can help you achieve your financial goals.
Set A Budget
Budgeting is hugely important when mapping out your financial goals. A budget is helping you to monitor is coming in, where it is going and how much you can save. If you set a realistic budget and stick to it you will start to see your savings balance grow immensely.
Creating a budget is a great opportunity to reassess your spending habits. Look at what you spend on groceries, entertainment, utilities amongst others. This doesn’t mean that you can’t still go out for dinner and spend time doing activities, it’s just being conscious to not be extravagant so that you can still achieve your long term goals.
It’s a great idea to download a tool that will help you with your budgeting, being able to see your whole financial picture in one place can help you to monitor and control your monthly spending. Whether it be a spreadsheet, app or inbuilt on with your bank. There are so many options, find the one that works for you.
Monitor and Review Your Financial Plan
It is important to remember that your goals can be ever-changing. The goals you may have today can and most likely will change as your financial position changes. You should expect to make adjustments as life changes.
Set up a review at intervals that work for you, for most this is yearly. Even if you don’t make changes it is good to check your progress, often you will find that you have achieved more than you realise.
Financial planning can be a lengthy process which some people find intimidating and overwhelming. While these tips can help you, it might be worth reaching out to a financial adviser to help you with your financial planning. They can provide an objective view, as well as the expert advice to overcome any issues you might have.