Money is always an awkward topic to bring up in conversation. Even though it’s one of the most essential parts of adult life, money tends to get swept under the rug and remain unspoken. There are many different articles, interviews, and books written on how you can have a healthier relationship with money. However, what we often neglect is who you are financially as an individual. Working towards ensuring your future and long-term goals is a daunting task that requires dedication and continued effort. As adults with bills to pay and mortgages to worry about, it can feel like you don’t have enough time to plan for retirement or even your next vacation. But don’t be disheartened! Follow these 6 objectives for your finances that will change your life.
Table Of Contents
Pay off all your debt
If you’re carrying credit card debt, you’re not alone. In fact, most people have some form of debt. Credit card debt is a negative entry on your balance sheet and is a form of debt that you usually incur through your bank or financial institution. Credit card debt is one of the most toxic debts that you can have because it has extremely high interest rates and a low monthly payment. It can take years to pay off if you don’t have a plan. It’s extremely important that you have a plan to pay off all debt. The first step is to create a debt repayment plan. This could be as simple as having a look at all the interest rates of your debt and paying the highest interest rates first. You should also consider choosing a debt repayment plan that is sustainable for you. Find out if you’re eligible for debt forgiveness or refinancing, which can significantly reduce the amount of interest you’re paying on your debt. If you have debt, make sure that you pay it off as quickly as possible. You’ll feel a huge sense of relief once it’s been paid off, and you’ll be less likely to incur new debts.
Set aside an emergency fund
Emergencies happen, and it’s important that you are financially prepared for them. Emergencies could be something as simple as needing to replace your car tires or as drastic as needing to replace the roof on your house. Having an emergency fund can help you avoid taking out more debt in these situations. There are a few ways that you can decide to set up an emergency fund. One of the most popular ways is to put a certain percentage of your monthly income into a separate bank account. You can also decide to have an amount of money put away in a separate savings account. Having an emergency fund of at least $1000 can help you avoid taking out high-interest loans, which can become a negative financial spiral.
Estimate how much you need for retirement
Retirement is only a few decades away, but you’ll want to start thinking about it as soon as you start earning your own money. You should be contributing a certain amount of money to your retirement fund through your employer or through an online investment platform. The amount that you should be contributing is dependent on your age and what percentage of your income you are comfortable contributing. If you are not doing anything to prepare for your retirement, then you are setting yourself up for a financial disaster.
Decide on what you want to be when you grow up
It’s important that you set long-term financial goals that are achievable. These are goals that you can plan around and have a set date by which you want to achieve them. Your financial goals can be anything from buying a house to going on a long vacation. It’s important that you decide on what types of goals you want to set for your financial future, and then figure out how you plan to get there. You should ask yourself if you are saving enough for your future. Are you setting up an investment account? Are you putting money away for retirement? If the answer to these questions is no, then you need to make some changes to your financial plan. If you don’t save for the future, then you risk ending up broke and having to depend on social security when you retire.
Stick to a budget
Budgeting is a skill that you will have to apply to your life if you want to have any semblance of financial stability. Creating a budget is an essential part of your financial plan. There are many different ways to create a budget. You can do it using pen and paper, excel, or with budgeting apps like Mint or You Need a Budget. The most important thing is to actually stick to your budget and not let it fall to the wayside.
Save for big purchases
It’s important that you start saving for large purchases that you know you will be making in the near future. This could be a car, a mortgage, or a vacation. Having a savings account where you are continuously depositing money is a great way to save for large purchases. Depending on how far away the date of purchase is, you can decide to either save a certain amount per month or withdraw a certain amount from the account every month. Having a savings account specifically for these types of purchases is a great way to ensure that you actually save the money.
As an adult, it’s your responsibility to make sure your finances are in order. You can do this by following these 6 objectives for your finances that will change your life. If you follow these financial objectives, then you will be financially stable and prepared for whatever life throws at you.
If you found this article helpful, please subscribe to my newsletter by filling out the form below so you don’t miss out on any future posts. Also, if you have any article ideas in mind, feel free to leave a comment on a topic you would like covered in an upcoming post.