You don’t have to be rich to gain financial freedom. Setting good financial goals in 2017 can help you achieve them more easily. However you do need to make sure you set realistic and specific goals that are actionable, measurable and can be done in a timely manner.
- Pay off your Debts - Getting rid of debts, be it car loan, student loan or any other loan for that matter can be one of the best feelings in the world. It’s not easy but can help you take control of your life once again. For that to happen you must curb creating new debts. Stop using your credits cards or better yet freeze them. Pay off your high interest debt first and understand that debt is only good if you can pay it off in time. We understand that things happen that we don’t plan for or emergencies happen, which is why it is important to have a fund for that.
- Grow an Emergency Fund - A well-stocked emergency fund can be your greatest friend in case of emergencies like a major illness, loss of job, natural disasters, or even a new set of tires. It will help to alleviate sleepless nights when unexpected expenses crop up. Your emergency fund should have enough money to cover the living expenses of at least 3 months and should be accessible at all times. It isn’t a bad idea to have a short term emergency fund for immediate emergencies and a long term emergency fund for large scale emergencies.
- Plan for your Retirement - Planning for your retirement from an early age is a smart move and will save you a lot of headaches in the future. Besides, your retirement goals can take longer than you think and circumstances can force you to retire earlier than you want. (Did I just say that?) You must understand your retirement needs and plan accordingly to save for the future. Learn good investment principles and stick to the plan. Also try to not touch your retirement savings because you could lose interest as well as paying taxes for withdrawal penalties.
- Have a Balanced Investment Portfolio - Having a well-balanced investment portfolio can save you from losing large amounts of money due to periodic market swings. To have a balanced investment portfolio assess your risk tolerance level and figure out how much time and money you are willing to spend. Then find the right investment choice for you which may include stocks, bonds, mutual funds, etc. You should have a plan for your long term retirement savings, such as a 401(k). Traditional or Roth IRA. A 529 plan is a great option for saving your child’s college fund. Having a financial planner on your side can help with which option is best for your situation and timeline.
- Create a Budget - No matter how much you earn, having a budget will teach you to live on less than you earn and save money. All it takes is a little dedication and correct planning. You should always create your budget based on your net income. Calculate how much you need for emergencies funds and retirement, determine how much to save then track your spending. Cut down on any unnecessary expenses due to any bad habits. Don’t forget to set goals, make a list of priorities and stick to it.
Always remember a good plan is worthless if you don’t take any action. Measure your progress and reward yourself for completing every small goal you set up. Just by reading this you have taken a step towards a better future so have fun along the way and it will soon become a habit. Of course, knowing the plan of action, what you will need and how to go about it could be explained by a trained and Certified Financial Planner.
Should you need guidance in navigating your budget, emergency funding, planning and retirement, please contact GPS Wealth.
Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. GPS Wealth Management and Securities America are separate companies. Securities America and its representatives do not provide tax or legal advice; therefore it is important to coordinate with your tax or legal advisor regarding your specific situation. The opinions and forecasts expressed are those of the author, and may not actually come to pass. This information is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of any specific security or investment plan. Past performance does not guarantee future results.