If you ever thought a financial plan is the sole preserve of people with lots of money, you are surely wrong. It’s for everyone serious about safeguarding their future as it’s an important document that details your path to reaching financial goals. A Lincoln Financial Group Study shows that about 77% of Americans are likely to set such goals. Would you like to know the financial goals to include in your future plans? Here are six you should consider.
Stick to a budget
Sticking to a set monthly budget is an excellent way to monitor your spending without going overboard. Unfortunately, the 2020 pandemic made it difficult for many Americans to focus on growing their finances. Even though business experts expect the global economy to take years to recover, you can fine-tune your spending for a better future. You can find a host of budgeting tools online in your quest to secure your future.
Save for emergencies
Emergencies are a fact of life, and the sooner you prepare for them, the better you and your family will be when the unexpected hits. Money set aside for crises is an excellent source to fall-back on, and is capable of helping to keep your head above water. Whatever your plans are for your financial future, an emergency fund should not only cover the unexpected and desperate situations. Financial experts usually advise that the perfect emergency fund must be at least six months to a year’s worth of monthly expenses. It is even better to go beyond this range because you never know how long the emergency may last.
Begin to pay-off debts
The feeling of being debt-free is quite liberating. Personal loans, credit card debts, student loans, and many others are unavoidable for several Americans. Maybe you have wanted to do a home remodeling for a while, but your monthly repayments put you in a challenging situation. When you do come into some money, begin to pay off your debts. Pick alternatives for big purchases; for example, instead of buying a house, check out properties for rent to find cheaper living options.
Save towards your retirement
By 2026, the aging American workforce will increase to a little above 40 million people. That is a vast number waiting for retirement. How many of them are adequately prepared for this? Are you in this category of people? It might not be too late if you make a deliberate effort to start saving for a pension from January 2021. That leaves you with a total of five years to make a fair amount of savings. Depending on how much you decide to put away, you may end up with a decent amount to stay comfortable. Remember, this is possible if you live within your means. You may want to reconsider your employer-sponsored 401k. The sooner you start saving, the more money you will have. Perhaps, you are curious to know how much money you will need to start saving towards a retirement account. Use a retirement calculator for this purpose.
Fortunately, investments are a wealth-building strategy catching up with many Americans. The stock market and real estate are excellent places to invest as you prepare for the future. Quite often, the stock market concept seems like a bourgeoisie activity, and that could be intimidating. You will be glad to know it is not so at all; anyone with a steady income can invest there but be ready for the rollercoaster ride the stock market is known for. The advice here is to start investing in stocks only after putting money away for your retirement.
Start a side-hustle
How does making more money sound to you? A financial goal is not entirely about saving up money. Today, especially with the pandemic, many people worldwide have side-hustles to complement their regular income. It takes a lot of commitment, but it is definitely worth your while. For example, do a self-assessment of your talents or passion. Is it writing or teaching? Several online platforms offer part-time opportunities for writers to submit quality articles for a fee. With schools closed, some educational installations need temporary teachers to provide their services online and at a price. Whatever your interests or skills, you can find creative means to turn them into side hustles that could fetch you some extra cash to build a better financial future.
Many Americans are hoping for a better 2021 and years beyond that. Therefore, as you set your financial goals, keep in mind that it includes taking everything else into account. For example, your career goals, marital status, parental responsibilities affect the extent of your plan. Ensure that you stick to the plan once you have laid it out to benefit from it.