Personal finance and reaching your financial goals really comes down to your intentions and your actions. This means that if you want to be successful with your finances in the future, it's important to set goals and know why you want to reach them. Everyone has different levels of income and expenses and different goals, but these general steps can help you get started in setting realistic financial goals so you can work towards making them a reality.
Determine Your Priorities
A good first step is to determine where your priorities are when it comes to your finances. Are you interested in moving towards purchasing a home, renting a vacation property, or paying down debt? Of course, your goals may change over time as well, and you'll need to plan for that as well. No matter where you are in your financial journey, it's key to figure out where to start so you can reach your ultimate goals. By determining your next financial priority, you can develop a concrete and disciplined plan for getting there. A financial planner is an excellent resource to assist you in this difficult process.
Create Your Budget
The next step towards being successful in this area is to create a budget and stick to it. One problem that many families run into is not making a plan for the money that they earn; thus, it ends up getting spent on things they do not need. Once you have established a.) what expenses you have and b.) what you'd like to save toward, you can create a budget that will allow you meet both short-term needs and long-term goals.
Start by writing down all of your fixed expenses, those are bills you must pay every month. Then, determine how much of your remaining income you can set aside for your various financial goals. That does not mean you cannot have fun with your money, it just means you need to create a line item for "fun" expenses as well (such as vacations, clothing, experiences and little indulgences) and remember to include that as part of your budget.
Post Your Goals Where You Can See Them
In order to be successful in reaching your goals, one useful strategy is to keep them somewhere you can easily see them. Consider posting your top goals in your office or next to your bedside. Seeing "Trip to France next year" every morning is a great way to reinforce why you are skipping take-out coffee and brewing your own cup at home.
Track Your Progress
You don't want to set a goal, then never reach it because you were not actively working towards it. One of the greatest benefits of working with a financial advisor is accountability. Your advisor will regularly check-in with you on the progress you are making toward your goals, and help you adjust your spending and/or priorities as necessary.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as investment, tax, or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.