5 Smart Financial Goals Everyone Should Have
26 Mar 2020
The state of your personal finances has a large impact on your overall quality of life. Dealing with financial stress can cause many health issues along with having to deal with the results of poor money management.
The good news is, by setting (and achieving!) a few smart financial goals you can put your financial stress behind you and live a healthier and happier life.
Here are five financial goals you should work towards achieving.
1. Improve Your Financial Literacy
The most important financial goal to work towards is to improve your financial literacy. This is not something to put on your future goals list, it’s what you should be focusing on right now. As with most things, the more you know, the better you will be — and managing your finances is no exception.
You can improve your financial literacy by reading books, listening to podcasts, or subscribing to magazines.
2. Start Budgeting
A smart money goal is to improve your finances by creating and following a budget. Many people tend to spend without thinking, which results in overspending and financial stress and hardship.
By creating and following a budget, you can develop better spending habits, use your money as a tool to move forward in life. and make sure all of your financial needs are met. Best of all, you can do this without the stress and worry that comes from mismanaging your money.
3. Create An Emergency Fund
One of the most important short-term financial goals is to create an emergency fund. Many people are not prepared for even a small emergency expense. In fact, 40% of Americans would struggle with paying $400 unexpectedly.
By creating your emergency fund, you’ll have money set aside just for those unexpected expenses. You can start your fund with as little as $1000, but it’s recommended to save 3-6 months in living expenses.
4. Establish Multiple Streams Of Income
Establishing multiple streams of income, whether it’s active, semi-active or passive income, is truly a smart financial move. Anything can happen to suddenly disrupt your financial stability. This could include a job loss, unexpected medical bills, or something more global like a recession.
By creating multiple streams of income you adding layers of financial security instead of depending solely on one source of income. There are many things you can do to get started on a second or third source of income today.
5. Pay Down Debt And Improve Your Credit Score
Nearly every big purchase you make is affected by your credit score, from your home to the mobile phone you use every day. Having a lot of unpaid debt will lower your credit score, making it difficult to be approved for much of anything.
An important goal is to pay down your debt, which will typically improve a bad credit score. Now is the best time to start focusing on cleaning up and improving your credit, especially if you are saving for a home, a car, or have another big life change in the works.
Smart Financial Goals To Have: The Bottom Line
By working on these smart financial goals, you can begin to enjoy financial stability and all the benefits that come along with it.
Do you need a financial advisor to help you achieve your financial goals? We can help! Contact us today to get started.