2020 has been tough for many of us. With the pandemic wreaking havoc on our savings, economy, jobs, and lifestyles, we switched to survival mode.
Coping with COVID-19 and protecting our loved ones became a priority. It was even hard to think about planning for the future. But as the year comes to an end, it's time to reflect. Did you achieve your financial goals? What have you learned so far? What can you do to better your future?
Moving forward, we want to help you build a better financial future. So in this post, we share six tips to increase your chances of building a solid foundation for the future, having fun, and thriving financially.
Restart With an End in Mind
Highly effective and successful people say you can't achieve much if you don't have an end in sight or mind. Similarly, you can't succeed at saving money if you don't know what you're saving for.
For many, the ultimate goal of saving is to achieve financial independence. For others, it means saving enough money to a point where they don't need to work to live comfortably.
So before embarking on your journey of saving, take time to have a clear picture of what you want to achieve. Write them down and place them somewhere prominent where you can frequently see them.
View Yourself as a Planner, Not a Saver
Studies show that people who plan for the future are more likely to accumulate more wealth than those who don't. This is because they become goal-oriented. They set goals and create a solid plan to achieve them.
For instance, if you set a goal to become debt-free in 5 years, your odds of succeeding are higher than you would if you simply said you want to get out of debt without setting a timeframe. Having a laid out plan is an important step toward achieving a better financial future.
Use Short Term Goals To Achieve Long-Term Goals
As you already know, life holds many uncertainties. Things can change between now and 10 years from now. And this uncertainty can be daunting when planning for the future.
One of the best ways to beat this feeling is to use short term goals to propel you toward achieving long term goals. So set short-term goals that are SMART (specific, measurable, achievable, realistic, and trackable).
For example, if you want to buy a house in five years, break it down to how much you need to save every month and work towards it. When you achieve them, set new ones.
Invest in Becoming Financially Literate
Earning money is just one part of a big equation. Saving and growing it is the other.
Investing and managing finances are lifelong endeavors. Experts warn that unless you make sound decisions financially, you will not achieve your financial future goals. And one of the surest ways to do that is by becoming financially literate.
Research shows that financially-literate people end up with more wealth than the less literate. So invest your time and effort in becoming more knowledgeable in personal finance and investing.
Maximize Financial Freebies
Many things in life are not offered for free. So if financial freebies come your way, take advantage of them.
For example, if you have a company pension plan, maximize the free money it offers. Contribute up to the maximum of what your employer will match. And don't stop there.
Find ways to take full advantage of tax laws. For instance, contributing to an IRA account will yield tax savings. This way, you will have enough funds for retirement.
Restart With an End in Mind
Many people dream of achieving financial freedom. Many more create plans. But only a few follow the plans to the end.
Now that you know what it will take to improve your financial future, be prepared to stick to the plan. Make it a habit to monitor your progress regularly, stick to your spending targets, live within your means, and more importantly have fun. Do you have any financial tips and insights of your own? Please share them with us.