We all have a list of things we want to achieve in life. Some call it a “bucket list” (a term I personally hate as you know but we’ll go with it for one post so you get what I mean). In that bucket list should include many financial goals for the future. Financial goals are important so you can be free to travel, gain a fun hobby, or spend time with the people you love instead of working all the time.
Are you dreaming of a better future? One where you do not have to work as much and you have less debt? If this is your end goal, you have your priorities straight. Before you can gain financial freedom though, you need to be aware of how to stop bad habits involving money.
Keep reading for six of the top tips for achieving your personal financial goals.
- Set a Budget and Stick to It
Setting a budget is the most important step you can take to get your finances back in check. When you do not know what is coming into your account compared to what is leaving your account on a monthly basis, the money can leak away without you realizing where it is going.
If you are in debt and have multiple credit cards you are paying on, Latitude Finance offers personal loans to assist you in consolidating those credit cards, so you only have to make one monthly payment. This will help your budget tremendously. Be sure to balance your bank statement regularly and keep to the budget you set. Tweak it as necessary based on extra income or additional bills.
- Be Knowledgeable About Interest
Do you know what the interest rate of your credit cards is? Do you know how much interest you are paying on your car loan? It is essential to know how much money you are paying to interest every month. It is also critical to know how much interest you are receiving on any certificate of deposits or savings accounts as well. If your interest rate is too high, you can check into refinancing your loans to get a smaller interest rate, which will save you thousands in the end.
Regardless of what Australian bank you use, you should be able to easily discover your interest rate with a quick call to a banking representative.
- Use Cash Only
If you cannot stick to a budget or do not have the willpower to say no to a purchase, then paying in all cash might be the way to go. Get rid of your credit cards and do not have a debit card. If you pay in cash only, once the cash is gone, it’s gone.
There is no more ability to buy things you want if all the cash went to pay the bills. Make sure to abide in that order as well. If you use cash only, you have to pay all the bills first, be responsible. What is left over can then be used to spend on things you want rather than need. This will make you realize how much of your money is actually wasted on stuff you do not really need.
- Make Financial Goals and Revisit Them Often
Another excellent tip to achieving your personal financial freedom is to set goals and revisit them often. Don’t just say I want to pay off my credit card. Make yourself accountable. How much extra can you afford to pay on that card monthly? Set a goal that states you will pay “x” amount by a certain date every month and stick to the plan. You can also do this for savings. Make a goal to save “x” amount every paycheck. Put it into a particular account to track your progress. You will be able to see your accomplishments!
- Pay Off Small Debt First
This is truly the way to go when you are trying to reach financial goals.
It is too difficult to try to pay extra on every loan or credit card you have. Find your smallest balance, even though it may not be your highest interest, and apply all the extra money to that one loan.
Once that loan is paid off, take the amount you were paying as extra on that loan as well as the monthly payment amount you just paid off and apply it to the next smallest loan. Keep doing this until all your debt has been repaid. It will go faster than you ever imagined.
- Don’t Live Outside Your Means
The last and final tip to achieving financial independence is to not live outside your means. Just because your best friend, a family member, or a neighbour got a new car does not mean that you need to. That goes with any purchase. Think about what you are buying and why you want the item before making the purchase. Just this small consideration will save you money in the end.
Why it is Essential to Plan for the Future
Nothing in life is guaranteed. If you think you have it figured out, no doubt that life will throw you a curveball and disrupt your way of thinking. This can occur in all areas of life including health, job layoffs, car problems, eviction, or financial trouble.
To plan for the future is to be ahead of the curveball. It means you have some money socked away for times just like this. To become financially independent, you must pay off your debt, set a budget, and make financial goals. If you do this, your dream of a better future and the ability to complete your bucket list is just around the corner!