Tips for Setting and Reaching Financial Goals in 2020
As 2019 comes to an end, it is an excellent time to reflect upon the year and begin thinking about your finances for 2020. What financial goals do you want to reach in 2020? Are there certain steps you need to take in 2020 to help you reach your long-term financial goals? Below are several tips and suggestions from our Michigan financial planners that can help you set and reach your financial goals in the coming year.
Five Tips for Achieving Your Financial Goals
Setting Realistic, Achievable Goals
Before you can create a road map for achieving your financial goals, you must set realistic financial goals that you want to reach. Therefore, the first step in setting financial goals is to choose goals that you want to reach. If your financial goals do not represent or coordinate with the vision of your future, you will not be motivated to reach those goals.
The second step in setting financial goals is to make sure that your goals are measurable and specific. For example, setting the goal of retiring early may not be sufficient to help you create a road map for achieving that financial goal. However, modifying that financial goal by adding a specific date or age can help you create specific steps for saving enough money to retire by your target date or age.
Create Long-Term and Short-Term Goals
Creating both long-term and short-term financial goals provides an incentive to continue on your financial path by allowing you to celebrate achieving financial goals on an ongoing basis. Short term goals can also serve as a road map for your long-term goals.
For instance, retiring early is a common financial goal for many individuals. However, that long-term goal can be overwhelming unless it is broken up into short-term goals. Breaking up big goals into smaller financial goals can help you achieve your financial desires. Therefore, the financial goal of retiring early could be broken up into smaller financial goals, such as:
- Contributing additional principal payments each month to your mortgage company to pay off your mortgage 10 years earlier than scheduled.
- Increasing retirement savings to max out your 401K every year.
- Opening a new retirement account and contributing a set amount of money to that account each month.
- Creating an emergency fund to handle any financial crisis that may arise.
- Paying off credit card debt in full within a certain number of years.
- Purchasing brand new vehicles five years before your retirement age and paying them off within those five years.
- Creating a comprehensive estate plan, which includes Medicaid planning, long term care planning, and incapacitation planning.
- Working with a Michigan financial advisor to identify financial issues, set financial goals, and choose various financial tools and methods for reaching your goals.
Always Set a Timeline
When setting financial goals, you need to include a timeline for achieving those goals. Without a timeline, you cannot track whether or not you are on the right path to achieve your financial goals. A timeline also gives you an incentive to continue working toward your goals and a level of accountability that can help keep you on track.
Create and Live Within a Budget
It can be very difficult to reach your financial goals if you do not know how much money you earn and where that money goes. Creating and living within a budget allows you to identify expenses that can be cut from your budget to create additional money to be used toward reaching your financial goals. A budget also helps you identify warning signs that you might be heading toward financial problems, such as increased credit card use, difficulty paying normal living expenses, or an increase in medical costs.
Monitor Your Credit Report
A strong credit report helps you accomplish your financial goals. You are entitled to free copies of your credit reports from all three major credit reporting agencies each year. You should obtain copies of your credit reports each year, review your credit reports for mistakes, and report any errors to the credit reporting agency and the creditor immediately.
Depending on your financial situation, it may also be worth investing in a monthly credit monitoring service to reduce the risk of identity theft and credit fraud.
Castle Wealth Group Offers Holistic Financial Planning Services
Setting and reaching your financial goals can be challenging. You might feel underqualified or not know where to begin. You are not alone. Many people are unsure about financial planning. However, with the support, advice, and guidance of a qualified financial professional, reaching your financial goals is possible.
The financial professionals of Castle Wealth Group offer classes and individual counseling related to all financial matters, including tax planning, retirement planning, estate planning, Social Security, Medicare, and long-term care planning. We provide you with the tools, resources, knowledge, support, and skills you need to achieve your financial goals.
If you have questions, call (844) 885-4200 to speak with a knowledgeable representative.
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