08 Feb How To Set And Achieve Your Financial Goals For 2021
The best way to start a year is to have excellent and comprehensive plans for yourself. Pay quality attention to your family, be a bit more punctual in your workplace, create a to-do list, live happily, and don’t forget to set financial goals.
The importance of having financial goals can’t be overemphasized because it helps you accomplish many tasks while ensuring you don’t spend too much on unnecessary things.
It is one thing to set financial goals; it is another thing entirely to achieve the set goals. Unfortunately, most people don’t know how to set and achieve their financial goals. Therefore, we will be unveiling the best five ways to set and accomplish all your money-related goals for the year. But before that, let’s quickly discuss the meaning of financial goals and their importance.
What Are Financial Goals?
Financial goals mean the plans you have for your hard-earned money. It means how you intend to spend your money over a particular period.
Financial goals include daily budget such as buying compulsory household materials, annual budget like paying house rents, saving for vacations, and long-time budget like investing in income-generating businesses.
Why Do You Need To Set Financial Goal?
Setting financial goals is a must for anyone who desires very speedy financial growth in 2021 because it controls how you spend.
It makes you have great value for your money as it keeps reminding you of the need to save or invest instead of spending it on unnecessary and worthless stuff.
It enhances your financial productivity because it motivates you to improve your work rate to increase your income level. It equally helps change your mindset, lifestyle and focus.
Five Ways To Set Your Financial Goals For 2021
Having discussed the meaning and importance of financial goals, it is time you learn how to set them. Below are the top five ways to create your financial goals:
1. Write Them Down
Just as you would do to a to-do list, your financial goals must equally be in a well-documented format, meaning they should be written in a paper. You don’t just write and keep it under your shelves. It would be best if you paste them on your walls, office desk, and every other place where you can easily set your eyes on them. If you see your goals more often, it will motivate you to go extra-miles towards achieving them.
2. Be Specific
Having a vague financial plan won’t be enough to enlarge your purse, you’ve got to be specific! Don’t just say, “I want to get a car in 2021”, Instead, say, “I want to get a new $45,000 Tesla car.”
3. Make It Simple By Categorizing Your Goals
As for the simplicity aspect of your financial plans, it must consist of short-term (five months) and long-term (two or more years) goals. For more clarity, your financial goals should involve three categories: money-making, needs, and wants.
Investing in businesses that will serve as an alternative source of income should fall into a wealth-making category; buying compulsory equipment should fall into the needs category, while ʼWantsʼ should include goals that are only meant for pleasure and fun.
4. Your Goals Shouldn’t Be Influenced By People Around You
Your goals should be as a result of what’s happening around you. Don’t be influenced by people’s achievements when writing your financial goals. Take a constructive look at yourself, determine what you need or want, and go for it.
5. Give Deadline Date
Having written down what you want to achieve, you should signify a specific date you want to achieve the goal. For instance, you shouldn’t stop at “I want to get a brand new $45,000 Tesla car”. Take it a step further by saying, “I want to get a brand new $45,000 Tesla car by August 15th, 2021.”
How To Achieve Your Set Goals For 2021
Now that you have set the goals, here is where the actions are required. This is the essential part of setting and achieving your goals. Below are some of the things you must do to accomplish your financial tasks for the year:
1. Save, Save, and Save
If you must meet your goals of settling 50% of your debts by the end of the year, or your goal of paying your annual house rent set to due in December, then you must engage in a suitable saving program as soon as possible. As a low-income earner, you should reduce your expenditures and ensure you save at least 20% of your monthly income. You are advised to automate your finances to help you save a percentage of your earnings per month.
2. Get Multiple Sources Of Income
Having more than one income source is extremely important if you are committed to achieving your financial goals for the year. Though your 9-5 official work is earning you a considerable amount of money, it won’t be out of place to invest in a small-scale side hustle such as Blogging, Affiliate Marketing, Freelance and writing. You can venture into an online business that allows you to earn while you sleep.
Factors To Consider Before Setting Your Financial Goals
1. Your present net worth: Determining your net worth helps you know the kinds of financial goals you should set for yourself. To know your net worth, you should subtract Liability (debts) from your assets. Mathematically, Net Worth = Asset — Liability
2. Your spending prowess
Having gone through the long read, we are confident you have gotten all it takes to set simple and achievable financial goals for the year. Should there be any questions, please paste them into the comments section below. We will do justice to it as soon as possible. We wish you a significant financial breakthrough this year, and we look forward to reading your success stories.