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How to Set Your Financial Goals for 2022

Setting goals for yourself is the best way to stay on top of your finances. Today I’m breaking down my goal-setting process so you can get more strategic about your finances. Having good practices when it comes to your finances is key to making sure you are always moving towards your goals and never just […]

Setting goals for yourself is the best way to stay on top of your finances. Today I’m breaking down my goal-setting process so you can get more strategic about your finances. Having good practices when it comes to your finances is key to making sure you are always moving towards your goals and never just sitting stagnant. 

Before we get started, there are a couple of things that are important for you to realize when it comes to goal-setting.

These 5 things will help you clarify your intentions and establish your goals. 

Envision It

Things will always happen in our minds long before they happen in reality. This is one way of saying you have to envision your goals! It’s very unlikely that you will just stumble upon a position you love to be in. 

Know Your Capability

That being said, people tend to overestimate what they can accomplish in a year. At the same time, they greatly underestimate what they can do in 5! 

Look Ahead and Dream

Take some time to envision your dream life if money and finances weren’t a factor. What would life be like? How would you spend your time? What passion would you focus on?

Put Pen to Paper

Now write it all out. It may seem pointless, but studies show the odds of it becoming a reality go up by 42%. Just by writing it down! It may not be useful now, but taking time later to look back at your goals may just reveal some accomplishments! Look back at any past goals you’ve set as well. Celebrate any of your victories and use them to inspire yourself.

Create an Action Plan

With your dream life laid out, it’s time to start making it happen. Create an action plan for achieving each of your goals. Take this time to find real numbers that correlate with your goals! Looking at real numbers will help you more accurately create a plan to achieve the goal. What kind of income do you need? How much do you need to save?

Don’t let any big numbers scare you away. Remember: If other people have done it, you can too. You just have to figure out how, and keep taking action to move closer to your ultimate goal. 

Now that we have reflected and set up our goals, here are 4 things you should accomplish before you move on to other goals!

These 4 steps will help you make sure you’re ready to start working toward those bigger goals.

Step 1: Save $1,000 for Emergencies

You need an emergency fund. Step #1 is establishing a $1,000 emergency fund as your safety net before starting on anything else! That way you always have a little bit of cushion that you can fall back on if you absolutely must. 

Step 2: Tackle High Interest Debt

Pay down any debt with an interest rate higher of 3%. Tackling your expenses will make saving down the road a whole lot easier. 

Step 3: Save 3-6 Months of Expenses

Double back to your emergency fund. This time, it should be filled with 3 to 6 months worth of your average living expenses. If your income were to disappear, you aren’t up a creek without a paddle and struggling to figure out what to do!

Step 4: Set Due Dates

Now it’s time to focus on your goals! Create a plan and work to knock off smaller goals on your way to the big ones. Setting “due dates” for these goals can not only serve as your motivation but help you visualize your accomplishments so far! 

When it comes time to focus on your long term goals such as retirement, consider investing. Your money will be working for you rather than just sitting doing nothing! 

Revisiting your financial goals is an important part of reaching them. Make sure to check in every so often to make sure things are going as planned! If not, reevaluate not only the goal but the date you’ve given it. Do your best to set goals that you can reach, but not too easily! Give yourself grace and really focus on your action plan. If I can do it, then so can you. 

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