How to Reach Your Financial Goals
Regardless of your age or financial status, you're likely to have some personal financial goals — both for the short term and the long term. Setting realistic and achievable goals, following a strategic plan to make progress toward them, and tracking your progress is the key to success in attaining your financial goals.
According to a survey, the most common New Year’s resolutions made by Americans include saving more, spending less, and paying down debt. That might give you an inkling as to where the American mindset is when it comes to money.
For married Americans, it is essential that spouses share the same financial goals, otherwise achieving your financial goals, both personally and for your family, is going to be a losing battle. Communication is key in any relationship. Develop your financial plans together, review your progress regularly, and make sure both of you are contributing to the same goals.
Taking a birds-eye view of your financial goals and prioritizing in order of importance will determine what needs to be done — and when — to achieve them. Retirement could be many years away, but your short-term goals could be for the next year or two.
It's important to figure out a workable and effective budget, which includes putting money away so that you can track how much you’ll need to save per month to contribute toward your stated end-goal. Don’t be discouraged if the dollar amount is overwhelming. The important thing is to have a set of tangible financial goals to work toward and strategic and achievable steps which keep you on the right track of your forward motion.
Sometimes it can be difficult to achieve those goals when temptations and lapses in discipline lead us from the righteous path of financial responsibilities. We want to lose weight, but someone offers us a donut. We want to save for retirement, but we also want that new car or that new house.
Here are some simple tips to make the journey to financial success easier:
Spend Less
Simple math tells us that if you spend more than you make, you’ll end up broke. But if you spend less than you make, you’ll have some money left over. Despite the many arguments and justifications that could be made for how hard it is to save money in this economy, you’d actually be surprised when you take a closer look at how easy it can be.
Start by taking a look at your monthly expenses. Do you have any recurring memberships that you aren’t using? Cancel them. Can you get a better rate on your TV plan? Do you even need a TV provider with all the streaming options nowadays? How about a home phone? Do you really need that? Your cell phone plan? Most providers are constantly offering better deals and discounts. Internet provider? Same thing. Can you brew your own coffee in the morning, instead of stopping off for that $5 cup on your morning commute? Is there a more efficient (ride-sharing) way to do your commute every day? Can you find a less expensive grocery store to buy your food supplies?
According to a recent review, most Americans spend $20 per week on coffee and up to $1500 per year on their commute.
Save More
Most Americans have less than $1000 in savings, and about 20% of Americans don’t even have a savings account. If you’ve freed up some of your income by reducing your spending, instead of using that extra cash to go on an extravagant shopping spree, start stashing that sweet cash away — and don’t touch it!
It doesn’t particularly matter what you’re saving for, whether it be retirement, or just to have an emergency fund in place for the unexpected, having a safety net of savings will always come in handy.
Speaking of retirement, it would also benefit you greatly to take advantage of any employer-sponsored investment plans (like a 401k), so that you can maximize your nest egg.
Invest
Get the advice of a financial expert. If you’re in a position to invest, then a sensible middle-ground approach is recommended. Conservative and holistic financial strategies are essential to achieving long-term financial success.
IMPORTANT DISCLOSURES
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC.