Do you want financial health? The first step toward achieving healthy finances is setting goals. Having a goal in mind will help you stay on track and move you toward your destination faster. Here’s how to set and keep financial goals to make your future better.
1. Write it down
It won’t be enough to keep a mental checklist of the financial goals you want to reach. Start by writing down what you would like to accomplish. Make a separate list of short-term and long-term goals. Once you see what you want to achieve with your money, it will give you the motivation you need to move forward.
You can go one step further and create a financial freedom vision board. Include pictures of the financial goals you want to accomplish, so you can have an image to refer to every time you check your bank account or balance your monthly budget. For example, if you want to be debt free in three years, post a picture of someone who is looking at a credit card statement with a zero balance.
2. Be realistic
It will be difficult to reach your financial goals if you set the bar too high. Make sure to aim within your financial reach. For example, if you set a goal to save 15% of your income, but you’re drowning in debt, you might want to lower that percentage, so you’ll have enough left over to pay your bills and meet basic living expenses without significant strain.
When it comes to saving money, start out slow, and stay within your ability. If you try to do too much too soon, you’ll only set yourself up for disappointment. Consequently, you’ll be more likely to give up prematurely. Set small, reachable goals.
3. Get support
Sticking to your financial goals will be easier (and more fun) if you ask a friend or family member to hold you accountable. You can check in with each other monthly or quarterly to go over your progress. Make your check-ins fun by meeting in person over coffee or lunch. This way, keeping on top of your financial goals won’t feel like work. Managing your finances can be fun, but it’s up to you.
4. Ask for help
If you find it is extremely difficult to stick to your plan and you’re actually falling further behind with your goals, it’s time to ask a financial professional for help. A certified financial planner can assist you with finding the right financial plan of attack, so you can regain your footing. If you’re in a spot where your debts are getting out of control, you might also want to consider meeting with a certified credit counselor. If appropriate for your situation, he or she can develop a debt management plan and help you start paying back what you owe.
5. Set up sub-savings accounts
Do you have one general savings account for all emergencies? This might not be the best approach to saving. You’re more likely to stick to your financial goals if you set up more than one savings account with different labels for each goal. For example, it would be helpful to have a separate account to save for a down payment on a new home or a vacation.
Another type of account you should have is a savings fund just for incidentals. This will help bridge the gap for expenses that aren’t dire emergencies but require financial resources in a short amount of time (for example, a new soccer uniform for your child). One savings account that can help you with this is Capital One 360. This online account allows you to open multiple savings accounts with a label of your choice. There also are goal tracking and automatic savings plan features.
6. Make savings automatic
It will be easier to stay on top of savings if you don’t have to think about it. The best way to do this is to set up an automatic savings plan. This way, the money will come directly out of your paycheck, and you won’t even miss it. Just make sure you don’t check the account too often. This will tempt you to spend the money you’ve worked so hard to save. If you want to know your balance, instead of checking whenever you’re curious, check during set times, such as quarterly.
7. Use technology
Don’t forget about the power of technology. There are plenty of online tools and apps that can help you track savings and keep on top of your money goals. One good app to try is Level Money, which provides you with updates on how much cash you have left to spend. Another app that can help you stick to your goals is Daily Budget. This tool calculates a daily budget based on your income and expenses.