If you do not set financial goals, you could find yourself in exactly the same place that you are now in a year’s time. Setting up financial goals for success will enable you to plan your money well, which in turn allows you to grow moneywise.
Here are some financial goals that you should consider setting before the year ends:
Have a Well-stocked Emergency Fund
An emergency fund might sound like a short-term financial goal but it is not. This fund has important life-long benefits such as:
– It is an important tool for managing money because if you can save money for your emergency fund, then you can save it for other reasons.
– It takes away your money worries because you know that you will always have a reserve when you run out of money
– It gives you an intermediate source of funding to use when you do not want to touch your investment accounts
– Having an emergency fund makes the stock market’s swings tolerable because you will know that your survival is not at stake.
When you consider all the advantages of having an emergency fund, it should move up several rungs on your priority list.
Get out of Debt
Anyone can get out of debt; you just have to be determined enough. At one point in your life, all debt will look like bad debt that you need to pay off, including your mortgage. Even if the purpose of the debt was noble at the beginning, it becomes a drag on your income over time.
Here are other reasons that you need to get out of debt:
– It leaves you with more money for savings and investments
– You get full control over your income
– You can quit a job that you do not like
– You become less worried and anxious about money
Create Several Income Streams
Even if you love your job, having several income sources provides you with some insurance. Here are more reasons why you should consider multiple income streams:
– You can fund your retirement savings with the extra income
– If you want to open a business, you can start a side business with the extra income without quitting your job
– You can throw the money at your debts to make them go away faster
– Several streams of income will give you an income portfolio, which means that you do not have to rely on a single source of income forever
If you have never considered getting another job, you should give it some serious thought, as it could open the door to other important goals.
Plan to Retire Early
Even if you love your job, planning for early retirement is a good financial goal for several reasons, including:
– Poor health might make you retire early and if you prepare in advance, you will be ready.
– Reaching your retirement goals might take longer than you think, which is why you should plan for early retirement
– Even if you do not want to retire fully at an early age, you might reach fifty years of age and decide to slow down
– It is better to be ready for early retirement and not have to do it instead of needing to retire without being ready
When you work hard for early retirement, you will front-load your portfolio for investment retiring. This means that you will not need to work so hard later in life.