We all have different financial values. Some aim to be rich enough to travel the world, while others simply aim for a simple, financially comfortable life. For some, their financial value is simply to afford to have fun at will. The levels to this fun could be clubbing weekly or hiking monthly. In short, we don’t all view money in the same way, and we don’t all aim to reach the same point.
That notwithstanding, there are a few financial goals that run across the board. Whether you aim to be filthy rich, or to live a comfortable life financially, here are 6 financial goals that you should aim towards.
1. Live below your means
To live below your means is to spend less than what you earn. It’s an important practice that involves setting boundaries among your social circles. Living below your means is important because it helps you to see the bigger picture. The opposite, which is living hand to mouth is dangerous because there may not always be steady cash inflows. But beyond that, we need to save, invest, and plan for a rainy day.
2. Build your emergency fund
Speaking of rainy days, everyone and I mean everyone, needs an emergency fund. It is a stash of money set aside to cover the financial surprises life throws your way. Emergency funds cater for job losses, sudden hospital bills, and the likes. It is essential, because at some point, life will surprise you, and you will still need money to get through it.
3. Get multiple streams of income
You should aim to have more than just one stream of income. Why? If it’s business, anything could happen and the demand for your product can fall to a point where you make losses. If it’s a job, you can lose it. It’s a possibility. Even if you love your job, creating multiple income streams is a form of income insurance. For that reason alone, it needs to be on your list of good financial goals.
4. Getting out of debt
Taking a loan in this life may be inevitable for different reasons. In itself, it’s not a bad thing, but you have to have a plan to get yourself out of debt. This is why it becomes a financial goal. At some point in your life, all debt is bad debt and needs to be paid off. That includes the mortgage on your home. Although the purpose of that debt may be noble at the beginning, it’s no less a drag on your income than any other debt as time goes on.
5. Plan for your retirement
When you’re 20 years old, it’s hard to actually conceptualize the idea of retirement. What I have come to learn, however, is that essentially there is no lower limit of retirement age. You can retire at 30 years old or even 25 years old, as long as you work towards it, starting now. Planning for your retirement is a financial goal for each and every person. Retirement plans are specially designed investment plans that let you save money for your retirement in a systematic and disciplined manner. A retirement plan will secure your life post-retirement.
6. Leave your finances in order upon death
In the Netflix series The Smart Money Woman, they speak about how people don’t always accept the idea that they will one day perish. For this reason, we tend to live our lives as though we will be around forever. It’s important to work towards leaving your finances in order once you die. Book Review: The Smart Money Woman By Arese Ugwu
It should be a goal to make sure that your loved ones are left at least a little bit better off as a result of your life. That means not only making adequate provisions for those who are dependent upon your financial resources but also making sure that you don’t leave them with a financial mess to clean up.