This Is How You Can Manage Multiple Financial Priorities
Keeping track of a host of financial priorities can be an uphill task that can often drive you crazy. Questions like ‘how can you build up a retirement fund and pay off debt?’, ‘How can you set aside funds for your future and spend money for your kid’s education?’, can frustrate you to a great extent. Yes, it’s not easy to manage all your financial objectives, short, medium, or long-term, at the same time.
Feeling financially vulnerable is quite normal. If you intend to strike the right balance in all matters related to your finance, here are a few ways in which you can help you manage your monetary goals effectively, not allowing your big objectives to take a back seat.
Prepare The List
The very first step towards managing your financial objectives is to jot down a list. You can either store that in a Word document or even pen it down on a paper. Irrespective of whatever method you choose, you must prepare a list of all your financial priorities and keep them in a place so that you can access them anytime you want. List down the objectives in their order of priority.
As per a few traditional priorities, you can serially put the following – pay off your debt. Have a minimum amount of $10,000 in your emergency fund, pay off the residual car loan, aim for a year’s salary in your retirement period, make an investment of $5000 in the stock market, opt for a 529 savings plan to start with a thousand dollars, so on and so forth. Different people have different monetary priorities, and those are dependent on their earnings, family situation, and goals in life, So, the sequence might change. The main reason why you should prepare this list is to be completely frank and honest with yourself.
Set A Timeline
After jotting down your monetary goals, the next step is to set a timeline for yourself. You can avail of goal trackers or prepare a map on paper. You have to set a deadline for your priorities and make sure that you stick to them. A few of these priorities might have a far off date, while some have a lesser duration. It wouldn’t be practical tracking an objective that is far away. Instead, track the immediate ones. It is better that you write down since that would give you a clear and a bigger picture. Don’t forget to put an actual date next to each priority.
Make A Budget
Now that you are ready with the required timeline, it’s time to create a budget. This probably the most crucial part. In case you don’t have a budget, track your regular expenses, and find out how much you spend on your needs and how much you shell out on your wants. Maintaining a distinct line between the two is necessary to have a proper idea of your spending habits. Estimate an amount that you can keep aside for your financial objectives.
Then, have a look at the timeline you have set and calculated how many months you have allotted till you reach the completion date you have marked for yourself for attaining your goal. Remember that a bare-bones budget is not permanent. After you fulfill the first financial objective, gradually shift to the next one.
Automate Your Money
Automating your finances is possibly the best way to attain your monetary goals. You will come across many banks that help you in setting automatic transfers between your savings account and your checking account. You need to opt for a transfer date from settings, fix a particular amount, and schedule it for every week or month.
Why is automation considered powerful? It establishes a habit within you without your notice. By automating your savings, you ensure that you maintain consistency. Aside from that, you can also reap benefits from savings accounts.
Remember, saving money is a skill not everybody can master. A lot of people give excuses for why they can’t save. However, it isn’t tough at all. Sticking to a budget through all circumstances is necessary. Only if you can stick to your goals, you can fulfill one financial priority after another.
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