5 Steps to Plan Your Financial Goals
January 5, 2021
Anyone can have dreams, but it takes guts to sit down and do the work to get things done. To accomplish any of your goals you need to create a blueprint. Here are five doable steps that can help you achieve your financial goals in 2021.
1. Give your money a job
There are plenty of ways to put your money to work. It’s not a “one size fits all”. Think about this in terms of your daily 9 to 5 job. You know what your schedule is and what your work duties are for the day. Same can go with financial goals and putting your money a mission. Make sure that every dollar you earn has a job and you know what you’re doing with it. You owe it to yourself to make the best use of your hard-earned cash.
2. Plan for short-, mid-, or long-term goals
Not all financial goals are alike, so the way you save for each one is going to be different, too. For example, you wouldn’t be paying off student loan debt without budgeting your expenses. Generally, your financial goals fall under three separate categories: short-, medium- and long-term goals.
- Short term financial goals: six months to five years (vacation, emergency fund, new pair of shoes).
- Mid-term financial goals: five to ten years (home down payment or paying off student loans).
- Long-term financial goals: more than ten years (retirement or building generational wealth).
3. Timing is everything
Deadlines are important for helping you achieve both large and small goals. Don’t stress yourself out too much by setting deadlines but instead use them to keep you accountable. You can adjust these dates over time, but it can be helpful to know what deadlines are coming up in the near future. Strategic deadlines are designed to help you move closer to your goals every day, week, and month.
4. Narrow your focus
Setting deadlines helps you prioritize each task to move you closer to your goals. We all have bills to pay, milestones we want to achieve, and things we want to do in life when it’s all said and done. At one end of the spectrum some of these things require your immediate finances such as your car payment or your rent. Label each of your goals in order from critical, need, or a want. Once you have your top priorities, focus only on those.
5. Stay on the course
Are you already saving through multiple accounts such as a Roth IRA, 401K, savings accounts, or investment apps? If so, it might be helpful for you to keep track of how much you’ve saved so far. If you plan on retiring at a certain age calculate how much it would take to save up enough money at the pace you’re going. If you sit down and crunch the numbers, you’ll realize how far you have to go and what you need to get you to the finish line.
Pour a foundation first, then build upon it
You can’t build a house starting with the roof first. The same goes for building a financial foundation for 2021. Before you can prioritize your financial goals, you need to lay everything out on the table. You may find that you want to de-prioritize certain goals by a few years, while others you may want to try and meet sooner. Following these 5 steps can help get a head start on your short term and long-term financial goals.
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