The Top 7 Types Of Financial Goals Everyone Should Have In Their Life
Although there are some goals that should be adjusted based on your current situation, there are some types of financial goals that you should always have in your life. These goals not only ensure that your current finances are in order, but they give you a fallback plan in case of emergencies.
So start making these specific types of financial goals to make some significant changes to your life this coming new year. It doesn’t have to be difficult to start either. Here are seven financial goals you need to set for the new year.
7 Types Of Financial Goals To Set This Year
1. Live Below Your Means
The most important of the types of financial goals for anyone to set is to live below their means. Living below your means is when you spend less than you make. When you do this, you have more money to save, can pay off debt, and don’t have to use your credit card as often.
To ensure that you live below your means, it’s important to create a financial budget and follow it carefully. If you design your budget correctly, you should not be spending every dollar on physical items and bills. Instead, some money should be set aside for paying off debt and savings.
2. Save At Least 20% Of Your Income
Almost all successful people and financial advisors recommend saving at least 20% of your income. These savings can help you out on a rainy day or can be used to purchase big-ticket items, such as vacations or gifts for loved ones. 20% should be the minimum.
If you are able to save more than 20%, then do that. Even if you don’t feel you can save money, always try to set some aside and strive for the 20% mark. Saving at least 20% of your income should definitely be one of your types of financial goals to set.
3. Planning For Retirement
It’s always best to start saving for retirement as soon as possible. Even though retirement is a form of savings, it should be kept separately from your 20% savings. So, create a retirement account so that you have a special spot for your retirement money.
As you get closer to retirement age, it’s a good idea to sit down with a retirement or a financial advisor. They will be able to walk you through the specifics of retiring and how much you need to save. It is one of the types of financial goals worth setting sooner rather than later.
4. Having An Emergency Fund
Setting an emergency fund is another goal to add to the types of financial goals list. An emergency fund is a set of money you can use in emergency situations, such as medical emergencies, sudden job loss, home repairs, or auto repairs.
With this fund, you don’t have to dip into your actual savings account to pay off these big-ticket items. Most financial advisors recommend having at least one month’s worth of living expenses in your emergency fund. For a better emergency fund, try to have three months’ worth of living expenses instead.
5. Be Debt Free
Being debt-free is the ultimate goal in the list of types of financial goals. Aim every year to be as close to debt-free as possible. Some years, you should make that goal a reality, but you might not be as lucky in other years. Even in the years when it’s not possible to be debt-free, focus on lowering your debt by paying off high-interest debts first.
6. Improve Credit Score
Your credit score has a lot of sway on your current and future life, as you probably know. So, always aim to improve your credit score. Even if you already have a great credit score, try to at least maintain the score by continuing to make good decisions.
Keep in mind that improving your credit score can take a long time. It is definitely a long-term goal in your list of types of financial goals. If your credit score is in the poor category, it may take years to improve it. Focus on the long haul and celebrate small victories so that you stay motivated while working.
7. Learn More
Finally, the last of the types of financial goals to set every year is to learn more. This goal may sound weird, but it is one that almost all the most financially successful people do. By learning more about finances and investments, you have more tools and resources for improving your financial state. Remember, the financial world is always advancing, so you should, too.
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Get Your Financial Goals Set Up Today
Get your finances on the right path this year with these types of financial goals. With these goals in place, it doesn’t have to be hard to start the next year off on the right foot. And if you need to pawn car title for emergency expenses, apply for one of our loans today by filling out our online inquiry form.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.