As the end of the year is slowly starting to creep up on us, many will be analyzing how we’ve spent the year and start thinking about ways we can improve our finances, savings, and investments.
Achieving financial independence is an admiral goal, but few people know where to begin. If you want to take steps towards financial freedom, we’ve put together some top tips for setting your financial goals.
Assess Where You Are
In order to set your financial goals, you need to assess where you currently are. This will require you to look through your savings, debts, and investments looking into your financial status and where you feel you need help. This may feel stressful, but gaining this sort of knowledge will allow you to set yourself some realistic goals.
Set A Budget And Stick To It
One of the best things you can do for your finances is setting a budget. Your budget should be achievable in order for you to stick to it. Spend less than you earn and make sure that your housing, food, and utility costs are around what you usually pay.
If You Have Debts, Pay Them
Debts are a significant burden and can stop you from achieving your financial dreams. Write down all of your debts and list them in order of smallest to the biggest. Next, you should add them up together and divide them by the number 12 to see if it’s doable to pay all of them off within a year. Pay off your smallest debts first and make financial sacrifices wherever possible in order to get them all paid off. You will not have to make these changes forever, just until you’ve got yourself out of debt.
Plan For The Future – Retirement, And Death
Death is not the nicest of subjects to be discussed but one that needs to be thought about and with retirement coming, you should be preparing for it. You need to work out how much you need to retire as this will help you put your savings into perspective, use a calculator just like this to figure out how much you can comfortably retire on.
Planning for the future will allow you to finance your funeral costings. Compare funeral prices now and take a look at how much you’re looking to spend and begin saving now. As funerals can be expensive, by regularly putting money aside for it now, you can prevent these costs becoming a burden on your family when you pass.
Establish An Emergency Fund
We are all vulnerable to unforeseen emergencies and without proper planning, your budget could fall apart. If you haven’t already put together an emergency fund, you should establish one now to protect yourself from any unexpected emergencies. Your fund should be two or three months’ worth of expenses.
Setting budgets and goals are great but these efforts are wasted if you don’t have a plan to stay on track and staying organized is critical to meeting your financial goals. As you continue to manage your money better, the benefits will extend much further than your than just account.
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