June 2nd, 2021 | | Rachel Carpenter
It is never too early (or too late) to make financial goals for yourself. If your dreams are to be debt-free, retire early, or just take a fun vacation, you need to make a plan and stick with it. Calculating a budget and staying consistent takes discipline, but the reward is far greater than the sacrifice. You do not need to cut the costs in every aspect of your life to make these dreams come true. We have 4 financial goals for you to consider as you plan for your financial future.
1. Have an Emergency Fund
You never know what emergency is going to disrupt your finances. The best way to avoid panic is to be prepared. An emergency fund can take away a lot of the money worries that you may have. With an emergency fund, you will always have a reserve if you get into a tight spot. Your emergency fund should cover 3 to 6 months’ worth of living expenses. In the case of an emergency – like losing your job or a mechanical issue with your car – this cushion will help you stay out of debt. This financial goal will bring you one step closer to financial freedom.
2. Get Out of Debt
Getting out of debt may seem like an unachievable task, but it is possible! Whether you are tied down with student loan debt, credit card debt, or even a mortgage reaching financial freedom means NO DEBT. Overcoming your debt will give you more freedom to invest in other areas of your life. One great way to take a step toward overcoming your debt is by consolidating your debt for a lower interest rate. This will make any debt and/or payments that you have much more manageable.
3. Plan for Retirement Early
Although retirement seems so far off, it is never too early to start thinking about your roadmap to becoming financially free during your later years. Planning for retirement is crucial. Think of a retirement plan as your lifelong emergency fund. There are several emergencies to consider when planning for your retirement. Poor health and family circumstances may result in early retirement, so it is essential for you to begin planning for it now. Frontloading your retirement plan now means you will not have to work as hard for it later in life (and may lead to early retirement options) when life might get in the way.
4. Plan for Fun
Enjoy yourself while you are young. Living a successful, happy life is about finding a balance between time with family and friends – and between work and leisure. Financial planning is important, but to stay consistent a proper balance between your life today and your future is very important. Financially, we can’t live as if today is our last day. We must decide between what we spend today versus what we spend in the future. Finding the correct balance is a necessary first step toward achieving financial security.
Your dreams are achievable, and so is financial freedom. Take the time to make a plan, budget your money, and have fun. You are only young once, so make it count. Your future self will thank you.