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How to set financial goals for yourself

Ask the average person on the street what their life goals are, and they’ll probably name one or a combination of the following: travel, get a good job, start a family. But how many of them would mention a financial aim?

It’s an inescapable fact that money makes the world go round and, without it, we wouldn’t be able to enjoy many of the finer things in life. But if money is so important, it begs the question: why are only some of us setting financial goals for ourselves? Having a clear plan can really help to map out your future, so which targets could you consider in order to help you along the way?

 

Build up an emergency fund

An unavoidable part of adult life is having bills to pay and, while most of our monthly outgoings come in the form of pre-arranged direct debit payments, sometimes misfortune can strike, saddling us with an unexpected and unwelcome invoice. This could be to correct a leaky roof, fix a broken boiler or repair a spluttering car engine but, whatever the reason, setting money aside on a regular basis to mitigate against unforeseen costs can leave you in a much healthier position.

Set up a holiday fund

Of course, the stresses and strains of everyday life leave us all needling a little break once in a while. That’s where a holiday fund can come in very handy. In a similar vein to your emergency pot, saving a small chunk of your monthly pay packet can soon build up and leave you with a very pleasant sum with which to plan your next trip to get away from it all.

Become financially independent

Gaining financial independence would represent nirvana for most of us, but it’s not a status easily obtained. To aid your progress towards this particular goal, it could be worth speaking to a professional adviser about how to manage your money and tailor your budget to your lifestyle.

For example, cutting out any unnecessary costs – such as unused gym memberships or magazine subscriptions – can improve your position. Clearing any debt will also help you gain financial independence, while you may also be able to add a secondary income stream to help you stay in the black, without the need for external funding options.

Provide for the future

Of course, for many of us, financial independence is about more than just protecting our own future. For those with families, leaving your loved ones in a secure position is arguably more important. In order to do this, set a good example for future generations by taking out adequate life insurance, familiarising yourself with estate taxes and discussing all of these factors with the ones you’re leaving behind. In turn, this may encourage them to follow your lead and set financial goals of their own.

Elliot Preece

Elliot is the Editor at ABCMoney. He manages a team that writes and contributes to many leading publications across a number of industries.

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