Setting goals is one of the best ways to stay on track. This is true no matter if you are dealing with your personal life or finances. Many people neglect to do this for one main reason: they are afraid of failure. While this is common, you don’t want it to hold you back. Without goals, you will never know if you are making progress or simply maintaining the status quo.
Below are five money related goals that you should consider instituting in the near future.
Save For Retirement
This is something to think about no matter if you just graduated college or are closing in on retirement age. There is no better time than now to set retirement savings goals. If you don’t, you may find that you are well behind when you are finally ready to hang up your work boots.
Save For Vacation
Everybody needs to have a little bit of fun from time to time. For this reason, you should start saving for a vacation. Not only is this a lot of fun, but taking some time away from the daily stress can lead to a happier and healthier life.
Pay Down Debt
For most people, debt is a big part of their life. Although it may seem that you will never escape your debt problems, if you stay persistent you will continue to make progress. Why not set goals related to paying down or paying off your debt? Believe it or not, this can be every bit as exciting as saving money.
Note: don’t focus on your debt as a whole. Instead, set goals around each individual debt. Focusing on smaller goals makes it easy to stay on track.
Cut Back on Expenses
Are you short on money every month? If so, you have two options: earn more money or cut back on how much you are spending. While everybody wants to earn more, this is not always possible. For this reason, cutting back on your monthly expenses is often times the way to go.
Once you review your budget, you may find that there are a few expenses that you can cut out entirely. In turn, you will free up cash for other things in your life.
Start an Emergency Fund
This may not be the most glamorous goal, but is one that you should strongly consider. An emergency fund is very important. In short, this is money you can rely on if you were to face an emergency. This could be anything from a job loss to a medical bill.
How much of an emergency fund do I need? This is a common question with no set answer. Many experts suggest 6 to 12 months in a liquid savings account. So, if your monthly expenses are $3,000 you will want to save anywhere from $18,000 to $36,000.
What are your thoughts on these five money related savings goals? If possible, focus on more than one goal at the same time.