Whether you’ve consciously planned out your financial goals or not, everybody has some they are working towards. However, making sense of your financial goals is a difficult task, that can become all the more daunting when debt and unexpected expenses factor in.
Many people find thinking about their financial goals, both in the long-term and the short-term, can cause anxiety and stress. With that in mind, here are a few tips and tricks for reaching your financial goals in the new year, whatever they may be.
First off, make sure you actually know what your goals are. While that may sound simple, financial planning is not everybody’s strong suit. That being said, setting goals doesn’t have to be an arduous process.
Try thinking about where you want your financial situation to be in a year, a month, and a week. For each time period, you should be able to come up with a reasonable goal and a game plan to get to said goal. This can help overcome some of the anxiety that comes along with thinking about long-term financial goals, and put into perspective how your goals stand up against your financial reality.
Now that you have a plan, look into how you manage your money. Whether you’re saving up for another term of studies, a new car or even a trip across scenic northwestern Ontario, you need to be well aware of where your money is going.
Unfortunately, it’s very easy to let your finances go into autopilot, but this must be avoided if you want to keep on top of your financial goals. Try using a financial tracking tool such as Personal Capital, or even open up a budget sheet in Excel. Seeing a visual indicator of your financial progress serves as a great way of keeping on track, and is also a great motivator!
There’s a great phrase that can describe many students: penny wise, dollar foolish. In essence, this refers to being very smart and stringent with small financial matters, but lavish with larger purchases.
It’s easy to cut back on alcohol or coffee to help meet a savings goal, but it’s more efficient to be mindful of bigger expenses. In the long run, you’re likely better off not focusing on the little things. While they may add up, they can also take away valuable attention from more important concerns.
If there’s one factor in financial planning that you should put front and centre, it’s patience. It can be overwhelming to plan decades into the future, but that’s ultimately how long-term success is made.
Too many financial goals are overly ambitious and defy a realistic model of how you and your money will behave. Don’t be afraid to give yourself time to reach your goals, repay your debts, or look for wise investments. We all know that time is money. If you can’t manage your time, you won’t be able to manage your money either.
Lastly, make sure your financial goals are not only reachable, but also prudent. In other words, don’t make it your goal to have $10,000 in the bank by the end of the year if you’re nowhere close to that. Your financial goals should, at least in the short-term, always be on the move as factors such as work, school, and other priorities change. This is all to make sure that your goals actually serve to put you into a better position, whether financially, mentally or physically.
2020 can be a great year for your financial goals. Make sure to stick to your plan, watch out for anything that can throw you off course, but also ensure that financial planning isn’t giving you too much to worry about.
At the end of the day, money matters, but it’s not everything.
Graphic by Paloma Callo.
