Setting And Achieving Your Financial Goals: Our Practical Guide

Our personal finances are one of the most common stressors in life. How much to save, where to put our money, what to save for, and what to do if you just can’t seem to save anything are all common worries. It is essential to be financially responsible, yet a startling number of people find they live paycheck to paycheck. 

Setting clear financial goals is one of the best ways to ensure you build a cushion of savings. There are many ways this can be done, as this article will explore. Achieving them can be trickier, but with planning, dedication and patience, it can be done. Read on for our practical guide to setting and achieving your financial goals.  

Decide On Clear Objectives

A great first step is to set out your objectives. Consider where you are in your life and where you want to be. Do you want to buy a house, have your dream wedding, move abroad or start a family? Decide what is most important to you and narrow your goals down. Then you can consider how much you need to save to get what you want. 

Be Realistic

It is crucial to ensure your goals are achievable. Ideally, you should set goals that will push you to keep saving more and more without being so high that you are demoralised when you don’t reach them. It can help to start with some smaller goals so that you can get into the habit of organising your finances around a particular goal and have some financial achievements to spur on your efforts. 

Think Short And Long Term

It can help to consider your long- and short-term goals. While it may seem a long way off if you’re in your early 20s, it’s never too early to start planning for retirement. The earlier you start, the more comfortable you will be when retirement comes around – and you may even be able to retire early. 

A good way to categorise short- and long-term goals is by considering whether you want to fulfil these goals within the next three to five years. Anything under five years can be categorised as short term, and anything more will be long term. 

Keep Track Of What You Spend

A key way to achieve your financial goals is by keeping a close eye on what you spend. Do this on paper, using a budgeting app or any other way that works for you. This can help you identify any patterns in your spending and change any bad habits you may have. It can also help you see what you’re spending the most money on and make you think more carefully about any purchases. 

Consider Your Insurance Options

Income protection insurance is an excellent way to protect yourself against unexpected loss of income in the future. This type of insurance offers a pay out of up to 70% of your annual income, typically until you retire. 

This can be an excellent way to ensure that even should the worst happen and you lose your job, you will still have money coming in, and you won’t have to push back hitting your financial goals. For help finding the right income protection insurance for you, consider getting in touch with Drewberry for expert advice and guidance. 

Put Money Aside As Soon As You’re Paid

It is a good idea to put money aside for savings as soon as you’re paid. This can help prevent overspending. Consider your options for savings accounts and find one with the highest yield. You could talk to different banks about your financial goals and get advice on which savings account will suit you best. 

Use Credit Cards Carefully

Credit cards can be a valuable tool to help you raise your credit score. This, in turn, can help you access the best terms on loans, mortgages and credit cards. Many people avoid using credit cards out of concern about getting into credit card debt, but credit cards can be a massive benefit if used carefully. You should use a credit card sparingly and avoid using more than 25% of your credit limit across all of your credit accounts. 

Learn More About Financial Literacy

It may help to take some courses or training in financial planning. This can help teach you different vital methods for making and keeping financial goals. Consider whether there are any courses available in local night schools or colleges, or choose an online course. 

Be Strict

Once you have made your financial goals and have plans in place to reach them, it is crucial that you stick to them. This is often the most challenging part, particularly if you’re unused to strictly controlling the money you spend. It may help to talk to the people in your life and tell them that you’re trying to save for a particular goal. Suggest cheaper options for socialising, like picnics in the park instead of meals out, and drinks at home instead of going to the pub.