As we get older, we find ourselves tangled with the questions about saving money and how to smartly use these savings. We usually go to experts and if someone has tried them, we all know how these bankers rob us of our money and we are left with nothing.
Today we are going to talk about how to save money and how to set financial goals.
Many of us already have financial goals, but usually, they all are hypothetical plans which never pan out.
We make these plans without writing them down and usually forget them. The best way to make plans or setting financial goals is by actually remembering them. Note them down, or to date them. Know your needs and think ahead of yourself.
Thinking ahead of yourselves always helps us in our chores. Whether it be day to day workload, relationships or whatsoever worldly problem. If we plan it out and stay loyal and steadfast to our plan, we can easily achieve the impossible.
Having a stable and honest attitude towards life can help us easy things out, this attitude can help us execute our plans.
If you’re struggling financially, there is nothing to worry about, we all go through such stuff and all settles down with time.
Know your needs and setting financial goals
Being calculative about your life is necessary in the likes of a fast growing world we are living in. Take a piece of paper and start writing your income and your needs simultaneously in different columns.
So, if you work x hours in a week and you earn y dollars, calculate your weekly needs. Calculate the amount you spend on food, laundry and other necessities.
Then you calculate the amount you need to save. Let’s assume you need to save around 1000 dollars monthly, now you need to divide that money into the number of weeks you have in a month.
So now you have to save 250 dollars a week. For example you earn around 600 dollars a week and all of that money goes into your basic necessities, you need to work harder so that you have extra money to save. This way, you’ll be able to calculate the amount you wish to save.
Make a one-year plan (short term financial goals)
Setting benchmarks is always good, you should know the prominent needs that will be arriving in a month or maybe in six month. You need to be ready for any kind of emergency as well. Diseases and sicknesses don’t come announced.
Your dad’s angioplasty won’t tell you when its own its way. So you need to be prepared. Take a piece of paper and map everything out. Map all the emergencies that could show up, map all the needs, map what you want after 6 months and make a complete plan for a year.
One year plans are hard, you can always make them easy by setting up benchmarks. Now that is completely up to you, if you want you can set goals for 6 months or 3 months. I’d prefer you go for three months so you stay motivated even if you back down a bit.
Make a five-year plan (long term financial goals)
You must be dangled, how are the both different, the number of years have increased, nothing else, right?
Well, you are wrong. There is a lot of difference in both. A lot happens and changes in five years.
You might get married, you might want to start a business or launch a new product of some sort. There is a lot you have to think about five years and you have to make plans properly. This is something that you should do yearly.
For example, okay save $20000 for year one and invest in something, buy stocks or something like that. Your investment should be done thinking that those decisions will affect your finances in the coming years. And make your future plans accordingly.
Calculate and manage your finances properly
We have talked about how to save and how to plan ahead of time for your beneficial future. Now let’s talk about how to finance our needs. Saving money can be difficult, we tend to spend more when we are earning more.
Let’s face it, the more you earn, the better lifestyle you tend to have. So the best way to manage your finances is to loan people money. Don’t loan money to people you know will back off and are not trustworthy.
Think before you decide to loan money to people. Work two jobs if you have the time and the mental ability to execute it. The best thing to do with your money is to look for startups and invest in them. Investing money is short term businesses is always good and profitable.
Another thing you can do to save is buy profitable stuff. Buy currency or buy goods which you know will not devalue in the years to come. Buy Euros or Ponds, you can also buy gold and jewelry.
If you like to collect things; collect valuables which have profitable price in the market.
This way you can manage your earning and make your money worth the while.
Think about investment
Earlier we talked about investing into different things like; small scale startups, funds, stocks and etc. All this can pan out if you make the right decisions at the right time.
Not like the guy who pulled out all his investment from apple before it got big. So do your market study at some product and invest in it.
Another thing you can do with your investments is to start your own business. Expand if you already have one, study and execute your plans. It is not that difficult. You can do it, if you have the will power and the right profitable plan to execute the job.
The best part of investing in your own business is that you can work with it on your own and bring out the best of it.
Honestly, if you’re investing your own money, which you saved by cutting off your needs, you will work hard enough for it to pan out.