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Planning ahead to meet your financial goals

Make this year your year of financial prosperity regardless of how much you earn, whether you are in debt or a self proclaimed shopaholic. This article will show you how you can save for those big financial goals like while still finding the money to take care of the little ones.

Goals are important to help you make smarter choices.  Recognizing that you are saving up for a car each month makes giving up eating out for lunch easier to bear if you know it will bring in an extra $200 per month into your car-kitty. 

Now that the tax season is here, and you’re getting your finances into order, it is a great time to look at your budget for the coming year. Decide on a few goals for the future.  Set a long term, medium term and a short term goal. 

Goals need to be SMART: specific, measurable, attainable, realistic and timely (Johnson, P. 2008).  Decide how much you need to save for your goal and by when you can realistically save the money for it.  Keep the goal locked into a time frame. Make a note of it on your calendar where you can refer to it. ‘Someday’, gives you too much leeway to never accomplish it.  Whereas if you give it a definite date to be achieved by then you’ve already pressed the goal into service for your unconscious mind.

So let’s say my goal this year is to save at least half the payment on my future Car - $15,000 by December 8th.  Each month I am able to save $600.  I could also make a few sacrifices this year like cutting back on my lunches out and my Saturday purchases at Barnes and Nobel then I could save a further $400 per month.

How to Gain financial control

Financial control does not mean a life of drudgery where you don’t allow yourself to go shopping or an indulgence now and again with a night out.  A balanced budget will help you save for not only the unexpected emergencies but for the little luxuries too. Personalize our savings plan to suit your lifestyle, budget and goals.

Living expenses: Most people who struggle to meet their financial commitments have basic living expenses that exceed 50% of their income.
Entertainment: Give yourself 10% to spend on yourself.  Whether it’s for fresh flowers in the kitchen or pedicures on Tuesdays.
Long term goal: This could be your future home, wedding or a holiday cottage by the sea.  If ever you run into health problems or are in the midst of a natural disaster later and you need to access funds, these savings could figuratively save your life on a rainy day.
Medium term goal: This is a goal that you can achieve within the next 2 years. You could buy a car, travel to the Bahamas’ or even dedicate it to further education.
Retirement: If your company offers a 401(k) plan, max it to the level that they will match your input.  Invest the rest into either a high interest saving account or look into hiring a financial advisor to help you invest in the stock market.
Choose your own goal:  Anything goes here from your future child’s college tuition, cooking lessons at the Le Cordon Bleu culinary school, to even owning your own airplane.
Debt: Make the decision to get out of debt.  Great that was the hard part. Now avoid using your credit cards for anything and rely on cash only, while you payoff your card debt. Once you’ve paid off your debts keep up you’re monthly installments only now put these installments into a savings plan.

Buying a new home

Buying property is a great way to build prosperity.  Equity is stored in a house that you can harness later for other financial goals in the future like paying for your education or as collateral for your own business.
You will need to gather a substantial down payment. Depending on how
earnestly you wish to buy  you can save a lot more money by either staying a few months extra with your parents or in a apartment flat share than going it alone.  Spend your monies on the basic bills and utilities and save as much as possible.
Research the housing market thoroughly. Take into consideration hidden costs like future housing insurance and home improvements that need to be taken into consideration when determining how much you’re willing to spend on you monthly mortgage payment.
Get a helping hand. If you can’t afford or qualify for a house on your own find a friend with whom you can buy your house with.  Within as little as 3 years with any luck you’ll both have made enough equity in your home to sell up and afford to each buy your own home separately according to Vicki Brackens a MetLife financial planner.

By Leanne Naidoo, LifeOrganizers Staff Writer.