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A Plan for the Future
As I’m coming off the heels of my wedding and heading into my 30s within the next couple of years, I’m refreshing my perspective on setting financial goals for myself.
My 20s have been filled with one specific goal and that was to make a certain income by the age of 30 and set up my income value for the rest of my life. My plan for my 30s is to shift from a self-centered attitude to focus on making the lives of those I love better with what I set up for myself.
Between short-term, mid-term, and long-term goals it’s important to figure out what’s important to you.
The Order of Goals
Your personal finance goals will always be a ladder process that looks different for everyone. The first step of the process will be to ensure that you have enough money to survive with food and shelter. Take a look below at the steps common financial gurus have highlighted. Many will call the steps by different names but the general process is the same for the average American.
Secure stable food and shelter with regular income
Build up an emergency fund
Get out of debt
Save and set up your future
The essential part (and the part I’m guilty of not following the closest) is the budget. Budgeting is the cornerstone of the entire process. Remember that the equation will always be to have more money in than out by the end of the month. Budgeting allows you to pull the levers to speed up (or slow) the timeline for achieving your goal.
General Goal-Setting Rules
So, how do you set effective goals in personal finance? Here are some tips:
Be specific: Your goals should be specific and measurable. Instead of saying "I want to save more money," set a specific savings goal, like "I want to save $10,000 for a down payment on a house."
Be realistic: Your goals should be challenging, but also realistic. Setting a goal that's too difficult can be demotivating, while setting a goal that's too easy won't give you a sense of accomplishment.
Set a timeline: Give yourself a deadline for achieving your goal. This will help you stay focused and motivated.
Write it down: Write your goals down and keep them somewhere visible. This will help you stay focused and remind you of what you're working toward
Sitting down and revisiting your goals is the most powerful tool. Here at Finessing Finance, our financial habits are tied to psychology.
Have a great week,
Jordan