When it comes to your future, you may have an idea of what you want your finances to look like, but you may not know how to get there. That’s why creating a plan is so important. It gives you something to look forward to, something to work towards, and the steps to get there.
As a financial coach, I’m dedicated to helping you reach your financial greatness. I believe everyone deserves a better future free from money anxiety and fear. With the proper planning, I know you’ll be able to reach the life you strive for!
Life is too short to be spent tossing and turning, overwhelmed by and concerned about your future. It’s time to create a plan that will set you on the right path, so you can rest easy and gain a peace of mind you never thought possible.
Here are six ways to properly plan for a better future, so you can start living your best life!
Manage your debt
Did you know debt is one of the most pervasive financial issues in America? A huge majority of Americans owe debt in some form, no matter the generation. An average of 80% are in debt, from Millennials to Baby Boomers. In fact, this LendEDU report provides a detailed break down of debt by category and age group: https://lendedu.com/blog/personal-finance-statistics/
Being in debt makes it nearly impossible to get ahead, and can put a damper on looking toward your future with excitement and hope. It’s hard to see a future filled with financial success when you still owe money every month.
Imagine if all of that money you were spending on paying off debt was going straight into a savings account. You’d probably be much less anxious about your financial future! Now, I’m not saying that getting out of debt is easy, but it is important. The best first step to overcoming your debt is to avoid accumulating any more. Then, you can move forward in paying off what you owe, one step at a time.
Come up with a Strong Savings Plan
In order to plan for the future, you need to have an idea of what you want that future to look like. If you want to truly live a life of financial freedom, it’s time to understand the importance of saving for retirement, emergencies, and any other life events you need a set amount of money for.
How many savings accounts, if any, do you currently have open? I’m sure you’d rather look toward your future with excitement rather than fear, and opening a savings account (or even more than one) will help you achieve that positivity.
Look into a few high-yielding savings accounts and start putting money into them each month. If you don’t have a lot to contribute at first, that’s ok! As mentioned earlier, managing your debt is your priority. But savings should always be in the back of your mind… Even if it means you’re only setting aside a small amount each month. And remember, these are your savings, which are separate from your emergency funds and other accounts. Try your best not to touch your savings until retirement, so you’ll have the maximum amount to work with in your golden years!
Create an Emergency Fund
Savings are crucial to a secure future, but you always want to make sure you’re also putting money aside for emergencies. How many times have you felt yourself overwhelmed by unexpected fees such as car repairs or medical bills? In order to feel stable in your future, you should account for those times you won’t be able to see coming. Nothing feels more stressful than being caught off guard, especially when it comes to your finances. As long as you have an emergency fund set aside for those fees you can’t predict, you will be that much more at ease.
Set Realistic Goals
Of course, coming up with a plan means coming up with goals to get there. It’s one thing to have an encompassing vision, but it’s another to think of the steps to achieve that vision. That’s why having goals are so important. However, it can be too easy to fall into a trap of setting lofty goals that make your plan seem more like a chore than something you’re doing to insure a bright future for yourself.
Make sure the goals you’re setting are realistic for your values, your lifestyle, and your budget. For example, if your plan is to retire by a certain age, maybe a goal will be to have a certain amount in savings by that time, rather than “I will have all the money I need for retirement by that age.” If you set unrealistic and hard to achieve goals, you’re setting yourself up for frustration and, ultimately, failure. With unrealistic goals, failure becomes excusable (well, I couldn’t meet that goal anyways) and even acceptable (at least I got part of the way there). Instead, push yourself to reach your goals by making sure they’re actually in reach!
Budget
I’ve said it before, and I’ll keep saying it to anyone who will listen — Budgeting is your ultimate key to financial success, freedom, and stability. And everyone wants, and deserves, their futures to be filled with all three! You should be able to look to your future with excitement and hope, rather than with dread and fear.
Like with setting goals, though, you want to make sure your budget is realistic for you. You’ll only set yourself up for failure by creating a budget so stringent you’d never be able to stick to it. If that means you only set a little bit of money aside for savings and emergencies, or you decide not to cut back on the things that bring you joy, that’s ok!
Setting a budget is all about taking control of your finances and your future. This is something you’re doing for your happiness and success, so it should be something you want to succeed at!
Gain Financial Literacy
Unfortunately, financial literacy is not a skill most people have. In fact, in a survey of Americans over the age of 50, only one third answered three basic questions about finance correctly. Younger generations aren’t any better, either — Other surveys concluded that 44% of American students placed at the lowest levels of financial literacy.
Financial literacy isn’t just the difference between understanding finance jargon or not. It’s actually costing you wealth. Studies found that those with lower financial literacy were more likely to incur higher fees and pay more charges, whereas those with a stronger literacy were more likely to save for retirement, invest wiser, and better manage credit card debt.
It’s time to gain financial literacy… This doesn’t mean you have to go to business school, though! Read articles, listen to podcasts, attend seminars, or watch TED talks — The options are endless for self-education. And if you’re finding yourself struggling with the learning curve, you can always come to a financial coach for guidance.
I want everyone to build a future they are excited about, and look forward to. You deserve to sleep soundly at night knowing your future is secured and that you’re in charge of your plan. Hopefully, these tips will help you create that plan so you can start heading toward the future you deserve.
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