Want to make 2021 go down in history as your best financial year yet? Budgeting and setting financial goals can be difficult, especially the part where you have to actually follow them. Your bank account doesn’t always have to be as dry as the Sahara desert, so let’s find out what you can do to make it rain. Even if it’s just one droplet at a time.
What are Financial Goals?
Financial goals are single or set of objectives that you want to achieve when it comes to your money, from building emergency funds, becoming debt-free, or saving for a dream vacation. Financial goals are essential as without having a plan to work to, you’re more than likely going to spend more than you should. You will more than probably come up short when you get hit with unexpected costs like bills, repairs, and any other of life’s uncertain risks.
Getting Started with Financial Goals
The first and hardest step is getting started. That’s why we help with a step-by-step plan for you to get started.
The first step to set goals based on time periods. You can categorize your goals based on the time you need to achieve them, such as long-term and short-term financial goals. Long-term financial goals are goals that you hope to achieve over a longer time period and may first seem a bit out of reach to you. Short-term financial goals are more small-scale and easily attainable as less time is required until you start to notice a positive change in your financial situation.
The second step is to categorize your goals based on how much time you need to allocate in order to fulfill your financial goals. Having a specific goal helps because you know how much you need to plan each week and each month to achieve your goal. So if you’re currently thinking that eating out is chewing up your income, the first step can be to identify a number that will become your maximum for ordering food in a month. This number then becomes your goal.
The third step is about budgeting. Budgeting is important because it helps you control your spending, track your spending, and save money on your goals. Regardless of what kind of budget you create, the budgeting process is a tool for making better financial decisions. Budgeting is not only important to control spending, but also to keep you informed when you are trying to achieve your financial goals.
The fourth step is tracking your progress. Don't think of it as a check to see if you're doing it right or wrong, but more of a way to track if your goals and budgeting are realistic. The great thing here is that you are in control. This means if you are going off track and struggling to keep to your budgeting goals, you can make simple amendments to fix it. It's the same as if you are doing better than you expected. You can either set bigger goals or treat yourself.
You need to make sure you set the right goals, track your progress, and take the steps necessary to prepare for success. There is little point in setting goals that you will not achieve unless you consciously make an effort to do things to hold yourself accountable and stay on track to achieve your goals.
Lastly, remember to reward yourself. Set micro achievable goals to help you get from goal to goal. One example we do in the Bits of Stock office is the team sets micro-goals per week. For example, this week, we will only go out for lunch once. We then use the lunch trip as a micro reward for hitting our goal. This helps us keep motivated and on track to hit our financial goals.
Eight Budgeting Tips:
- Print it out - Similar to household bills that appear in your mailbox, a printable budget can help you plan your spending and track it. Creating a budget as a template can help you keep your finances under control and save more money.
- Budget the ten most important financial goals you have set for the new year.
- Flexibility - Make sure that your budget is flexible and flexible enough to fluctuate. One tip is to tie your budget to your life goals as it becomes much easier to stick to it because you can immediately how it affects the rest of the year and whether you are meeting your goals.
- Concrete and quick - Ensure you make your goals more concrete and set yourself a goal that can be achieved quickly. Setting a time and date for achieving your goal can also help you to make the goal more concrete and to measure your progress more easily.
- Stay realistic - Customize your budget to specific needs and ensuring that you plan enough for all your spending can help you set a realistic budget that will allow you to stay on track longer.
- Prioritize - Budgeting that helps you achieve your financial goals becomes even more effective if you review your priorities every seven days and make adjustments to your spending and savings if necessary.
- Stick to it - By setting and sticking to a budget, you can better control how you achieve all your other financial goals.
- Tools - Using tools or cash back apps is an additional yet smart move you can make towards a more financially secure future. We recommend checking out Bits of Stock, an app where you can earn Stock Rewards in the brands you shop with. For more information on Bits of Stock and other tools available read up on A Hustle a Day Keeps the Doctor Away.
Master your Finances
Once you achieve your short-term goals, you will have the confidence to set even bigger goals, which in turn will lead to greater success. Even if you have already mastered your budget, there is still time to evaluate it and set new financial goals. To create a simple budget all you have to do is choose a day and time to get started. Make sure to keep your targets in mind and remember that being money smart today will provide you more financial freedom in the future.