If you read the title of this article and thought “what goals?” then this piece is for you. It’s all too common to think about goals in other areas of life but not when it comes to finance. The topic of money can be understandably stressful. It’s easy to feel as though you never have enough, and many people do not have much education around financial topics. The tips below can help you change your approach to personal finances for the better.
Interrogate Your Attitudes
Your first step should be to think about your attitudes regarding money. If you’re in a relationship in which you share finances, you should do some of this together. Are you a saver or a spender, and what does each of those terms mean to you? Think about money as a tool and how you can make it work for you.
Keep in mind that being responsible with your personal finance does not mean that you can never spend another dime on something frivolous or that you love. On the contrary, getting a handle on your money can allow you to indulge in those things without guilt or worry because you’ll know that you can afford them and that you are still being responsible.
Articulate Your Goals
Yes, there really should be more to your financial life than making your paycheck last until the next one arrives and occasionally having the disposable income to buy fun things to go on vacation. At minimum, your financial goals should be to build an emergency savings fund, fund a retirement account, and pay off your debts
Once you have these basics down, you may want to consider others. Common examples of financial goals are to grow your wealth and make smarter investment choices, save up for a down payment on a house, retire early, or put away money to pay for your child’s college education.
Make a Plan
Your next step after articulating a few concrete goals is to have a plan for achieving them. Maybe you are trying to cut back on your overall expenses. You may want to track your spending and budget more carefully, cutting out wasteful costs that you don’t care much about. There might be other ways to reduce your spending as well. If you refinance student loans, you might end up paying both less each month and less in total over the long run if your interest rates are lower.
If you are trying to save toward retirement or for an emergency fund, consider having a portion of each paycheck automatically diverted to those accounts. Pay attention to the fact that working toward your goals is less about one grand sweeping gesture and more about changing your habits and making steady progress.
Track Your Progress
It’s important to track your progress to get a sense of how far you have come as well as to allow yourself to make adjustments along the way. You might notice that one particular strategy isn’t working well, or you may decide that you can ease off a little bit and give yourself more disposable spending money. Be sure to reward yourself as well when you reach certain milestones you’ve set.