Whether your plan is to launch your own business, raise a family, retire young, or travel around the world, in order to achieve your financial goals, you will need to have adequate funds behind you. When it comes to financial planning, you will need to have a think about what is important to both you and your family, and strategically plan how you aim to achieve your financial goals.
While we’re currently facing challenging times because of COVID-19, you shouldn’t use the pandemic as an excuse to fall at the first hurdle, so with that in mind, here are our expert tips on how to reach your financial goals.
Make a Budget
Although it may seem like an obvious tip, creating a budget from the beginning can help you keep track of your expenses. Whether you have money to spare, or you’re counting every penny, visually seeing your income and outgoings can help you come up with strategies to save money in the long run. There are numerous benefits that you can gain from drawing up a budget, such as identifying problems before they occur and meeting your financial objectives.
Create an Emergency Fund
No matter how organised you are, emergencies can occur when we least expect them. Whether your car has broken down, your boiler has broken, or you need to pay for medical expenses, having an emergency fund in place can reassure you that you’re able to cover any costs immediately. It’s advised to begin with £1,000 in savings, which can be used as and when you need it. The last thing you want is to be faced with an obstacle that you can’t afford to pay off, so creating an emergency fund sooner rather than later is crucial.
Improve Your Credit Score
If you would like to take out a loan, there are several things that a lender will take into account first, such as your credit score. The better your credit score is, the lower rates you will have to pay. This article from New Horizons, How to Fix a Bad Credit Score Fast, is ideal for anyone with a bad credit score. Being approved for a loan can be difficult with a bad credit score, so you can use New Horizons to help you find loans for bad credit scores. The broker has helped over 4,500 people find a loan everyday; with loans that can be paid out in as little as 15 minutes.
Save for Your Child’s Education
If you’re a parent, giving your child the best start in life will naturally be your number one concern. As they get older and head off to university, you may want to give them a helping hand financially to ensure they’re well supported during their course. From an early age, putting money aside each month from your income to contribute or pay for their entire course will be highly beneficial for them in the long run, meaning your child won’t run into debt once they have graduated.
Whether it’s for clothing, food, or appliances for the home, the places where you shop can have a major impact on how much you spend. When you next go shopping, making smarter decisions with your money can pay off in the long run, helping you to save cash that can be used for other things. Buying second-hand items, choosing own-brand products, and only sticking to the essentials can help you manage your money better.
Review and Reduce Debt
If you are in a mountain of debt, don’t let your situation paralyse you. Combining debt management techniques with financial planning can help you lower your debt when using tactics such as creating a get out of debt plan, cutting back on expenses, getting a second job, and prioritising your debts. There are lots of ways that you can make money online, which can increase your income and provide more financial stability. The last thing you should do is bury your head in the sand when it comes to debt. Whether you need to pay off your credit card, student loan, or car loan, taking small steps can go a long way in reducing your debt.
Save for Retirement
Even if your retirement is decades away, there is never a better time to start saving than now. While saving money isn’t easy, it’s crucial for securing your future and being financially healthy. One of the best ways to save money for your retirement is by paying yourself first. To do this, you should save a certain amount of your monthly income before you spend cash on other things. You may benefit from having a separate bank account that you can use to transfer money into. If you receive any tax refunds, raises or bonuses, you can put them into your other bank account rather than spending it straight away. You may also have a workplace pension that is arranged by your employer.
Set Financial Goals
Whether you would like to go on a family holiday next summer, or you’re planning to purchase your first home, setting financial goals from the beginning will give you something to strive towards. When listing goals, it’s important that you categorise them into three categories, which are short-term, medium-term, and long-term. Short-term goals may include purchasing a laptop or clearing debt off your credit card; medium-term goals may include buying a new vehicle, whereas a long-term goal could consist of buying a property or retiring with a comfortable amount of money. There are SMART goals that you can set yourself which will help you achieve your financial goals.
Once you have established your financial goals and created a budget to help you track your spending, you should have a better idea of what you are saving for and how much money you will need to achieve your goals. If you have long-term goals in place, you should consider investing your money. When you invest, you will be putting cash aside for retirement or for your child’s education. The best way to do this is by ensuring your money is deducted automatically from your salary or bank account and placed into an IRA (individual retirement account).
With millions of people in the UK losing sleep due to money worries, the last thing you want is to fall into this statistic. If you have financial goals that you want to achieve, it’s important that you stay committed to saving as much money as you can. Even if this means living below your means, you need to remember that if you spend less than your income, you will be able to save money for your future. There may be times where you struggle to get by, but staying committed to your financial goals and overcoming challenges along the way can help you achieve them quicker. No matter what your financial goals and aspirations are, to achieve what you have set out to do, it’s important that you monitor your finances on a daily basis and put all the strategies above into practice. Even though we’re currently in a pandemic, there are lots of things you can do to build a healthier financial future.