A Beginner's Guide: Setting Up Financial Goals

October 13, 2020 | Peyton Sawyer

 

planning for future 

 

Remember High school? You learned about math, biology, chemistry, and all of those many other subjects. Wouldn’t it have been useful if they taught some financial education? That would have been extremely convenient in today’s financially driven world. If people would learn in school how to handle money, how to save money, how to file a tax return, and how to open and maintain a retirement savings account, we would have a better idea of what it means to financially handle ourselves.

If you haven’t been exposed to these subjects, don’t worry. Here are a few guidelines on what healthy financing looks like, how to set up goals, and set yourself up for the future. We’ll also cover what to do in the event of an emergency where you might find yourself in need of fast cash.

Setting Up Financial Goals

In order to efficiently work with your money, you need to know what you want to do with it. The money you have must work for you, and in order for this to happen, you must tell it where to go. So, you should have your financial goals set up, and work towards them.

You can divide these goals into three categories:

  • Investment
  • Savings
  • Necessities

Let’s take a look at these goal categories and what they represent.

Investment

Here you are actually paying yourself. With every paycheck, you must make sure that you invest some money. Investing some of your earnings means that the money will bring you more money in turn, either in the long term or in the short or medium term.

Some of the more common investment goals are:

  • Education (financial education included)
  • Health (a visit to a nutritionist or a psychologist counts)
  • Business investments

Savings

This is one of those goals that we only realize that we need later in life. The number of adolescents that have a self-started and self-managed savings account is very small.

Some of the more common savings goals are:

  • Rainy day savings
  • Saving for a vacation (you should do this every year)
  • Retirement savings account
  • Black Friday (yes, there are people who do this)
  • Buying a home
  • Buying a car

When you create a specific saving goal, you must decide what amount of money should go towards it every month. You should make sure that you stick to your goal, no matter what happens.

Necessities

Life nowadays is tough. Sometimes necessities are as large as the paycheck. However, this is the place where you can make some cuts, and you can find some wiggle room for your other goals. The most common necessities are:

  • Housing: You should consider if you have a home that is fit for your needs and if there is anything that you can do to lower your housing costs. If you live in a house that is large, you may consider changing it to a smaller one.
  • Bills: The most important step is to always pay your bills on time. Then, you can add a goal of paying off some of your credit cards to lower your bills.
  • Food: If you create a meal plan and always stick to it, minimizing waste, you will notice that your food spending can go down dramatically. Make it your mission to not throw away food and to cook from scrap. This might take your groceries bill down with as much as 50%. Educating yourself to eat the leftovers (and to store them properly) will have a huge impact on your financial well being.

Speaking about financial wellbeing, what was the last book you read about how to save money or about how to invest? You could use this idea for your next investment goal. Do you find it difficult to invest money into learning about spending money? Then you should ask for help and title loans Wisconsin might be the help that you are looking for.

 

 financial planning

 

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