Is money a constant source of stress for you? Does it create tension in your marriage?
You are definitely not alone. Study after study reveal that money is often a leading cause of stress.
It doesn’t have to be though. You can start today by setting goals, creating a plan and taking action to reach that financial freedom you dream of!
For many taking the first step is the most difficult. Where do I even start? You are in a never ending cycle of working countless hours just to pay bills and sometimes that isn’t enough. Or you can comfortably pay your bills but haven’t even thought about saving for retirement or the dreaded college tuition looming in your future. Perhaps you have all of that taken care of but you just need that extra boost to actually enjoy your money?
Whatever your situation is, the first step is always creating a plan. Taking a road trip without a clear destination is fun and exciting but unfortunately life just doesn’t work that way. You need a destination (goal) and a plan to get there. There will be bumps along the way for sure but knowing what you are working for will ward off many unnecessary detours.
So let’s get started.
Before creating a plan of action in the form of savings accounts, budgets, investments, etc. you must first answer a few pertinent questions.
What do you want your life to look like? Think vacations, career, daily routines or large purchases such as a home.
What would you change first about your financial situation?
What freedoms are you searching for that extra money/less expenses would provide?
Once you have answered these questions you can begin to narrow down what your goals should be. For example, if you are wanting to purchase a home within a year then maybe saving for a down payment is your first goal? If you would like to stay at home with your kids versus working a typical 9-5 job, maybe eliminating debt would allow you to do that sooner?
Does that make sense? You can match your desires for your life with what your goals should be. Once you set those goals you can begin to create a unique plan for your situation. Everyone will have a slightly different plan based on current income, expenses, family or work obligations, etc.
I have listed below 7 financial goals that you should consider when creating your budget. These goals may not be on your radar quite yet and that is perfectly okay. Keep them all in mind as you begin to think about your financial future in order to set yourself up for success.
I would recommend eliminating debt in this order but remember this may vary slightly depending on your goals or situation.
Emergency Savings Plan
Most people recommend having enough money to cover 3 months expenses in the event of unemployment, sickness/injury or re-location. I would also note here that having a life insurance policy is highly recommended.
Who knows what social security will look like when we need it? We have to create our own financial security and the earlier you begin saving the better. Now if you can’t do that right now, don’t panic. Just begin to take the steps necessary to be able to.
College Savings Plan
Hopefully, scholarships and financial aid will take care of this large expense for you but it is best to be prepared. They may not understand it now but allowing your kids to further their education without an excessive amount of debt is one of the best gifts you can give. There are tax incentives for setting these accounts up so be sure to check it out!
What are your top 3 purchases that you need/want or lifestyle changes that you are after? House? Car? Career Change? Leaving your job to be a stay at home parent? Now match a number with that goal. Down payment needed? How much of your expenses do you need to eliminate before taking that jump into a new lifestyle?
I call this kid savings because it is a savings or investment account to cover those future expenses for your child as they grow. College, purchase of a car, wedding, inheritance, whatever it may be. This may not even be a thought right now but why not dream big? Plan to succeed!
This is a side item on your budget that sometimes we forget about and it can derail us if we aren’t careful. I have 3 kids all with summer birthdays. It is also the time of year we take a week-long vacation so if possible I like to save/plan earlier in the year. It is not necessarily a “goal” but more of a planning tool so that I can stay on track with my long-term goals. I know people who have a percentage of their paycheck deposited into a separate account all year specifically for Christmas shopping. In November they have it already saved up and ready to go. How smart is that!!!
Now that we have listed 7 financial goals for you to think about, you are on your way to creating that plan to financial freedom!!
In a later post I will go into more detail about creating specified plans for each of the goals mentioned. But in the meantime, if you need help with some direction on your financial situation or creating a working budget feel free to send me an email. I’ll be glad to help you get started!!
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