Setting goals is the first step in becoming financially fit. You have short goals and long goals, each with different steps along the way to achieving them. You may have goals for yourself, your family, your home, your career, your retirement, or for all of these things.
Taking action and staying accountable for these actions are your next steps. So, what do your financial goals look like? If you’re stuck on how to start, here are some ideas.
Identifying Your Financial Goals
Do you have a family?
- Be debt-free.
- Plan for children.
- Plan for children’s college tuition.
- Help mom and dad as they age.
» Learn more: How to use life insurance to cover your debt.
How about your living situation?
- Purchase/sell a home.
- Purchase second (vacation) home.
- Remodel home.
- Pay off mortgage.
- Kids moving out? Downsize perhaps.
- Planning on more children? An upsize may be in store for you.
What about your job?
- Maybe you are looking for a better paying job?
- Looking to move up in your career?
- Turn a hobby into income.
- Go back to school.
What about retirement?
- Boost savings.
- Retire by a certain age.
- Have funds to enjoy hobbies/travel.
- Live a healthy lifestyle.
We’ve laid out many goals to aim for but in no way do these encompass all possible goals. You may only identify with one or two, or maybe you want to aim for them all. Use this list as a starting platform on your journey to financial fitness.
See what you’d pay for life insurance
Make Actions to Accomplish Your Goals
After you decide what goals you want to aim for, it’s time to start planning on how to accomplish them.
Create a Budget
A budget should include saving for both short- and long-term financial needs. What type of budget you make depends on you and your goals.
Plan to Reduce Debt
The biggest drag on any financial plan is debt. Credit card debt can be one of the worst kinds to deal with because it has no value, unlike a mortgage or student loans. Learn more here: Tips for Managing and Paying Off Debt.
Track Your Credit Score
Your credit score can do you some big favors, or it can really hold you back. Each year you are legally entitled to a free credit report from each of the three main reporting companies – Equifax, Experian, and TransUnion. Read through your report and check for any errors. Contact the credit reporting company if there are errors and they will assist you on correcting it. Improving your credit score takes time, but isn’t impossible.
Put Your Savings to Work
After creating a budget and reducing debt, you will start to see you have a little more money in your pocket. Hold off on buying those new shoes or set of golf clubs, instead make a plan for your savings.
If you plan on having children, or already have them, you may want to consider putting those savings into a college fund. If your future doesn’t include children, put it towards increasing your retirement savings or your emergency fund.
Along with creating a plan on how become more financially fit, it’s also important to plan for the unexpected.
Things to think about:
- Sudden change of income
- Death of a family member
- Health issues
Life insurance is one of the most important purchases you can make when planning for the unexpected. Having a life insurance plan in place can make sure the goals you had in mind for your family can still come to fruition.
» Compare: Term life insurance quotes
Life insurance replaces lost income to ensure a mortgage will be paid, children go to college, and final expenses will be covered. Life insurance doesn’t have to cause your budget to take a hit either. Term life insurance is very affordable and Quotacy is here to help make the buying process as easy as possible.