12 Smart Financial Goals to Make You Financially Stable

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Smart financial goals examples for anyone who wants to become financially secure

Many people dream of financial stability, but what they lack are smart goals. To become financially secure, you need clear, achievable goals and a commitment to achieving them. Without well-defined financial goals, you will find yourself spinning your wheels and unable to change your financial situation.

So, if you are serious about creating a better financial future for you and your family, here are some examples of smart financial goals anyone can achieve.

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SMART FINANCIAL GOALS EXAMPLES TO MAKE YOU FINANCIALLY STABLE

1. TO INVEST IN FINANCIAL EDUCATION

The starting point for anyone who truly wants to become financially secure or enjoy financial freedom is to become more financially literate.

A lot of the financial problems people face can be attributed to a lack of basic financial education. So, if you are going to make changes to your financial life, this is a good starting point.

Now, some of you might think you know everything there’s to know about how to manage your finances, but the truth is, when it comes to money management, there’s always room to learn and improve. So, one of your major financial goals should be to invest in your financial education.

For example, if you know everything about debt, your next step should be learning how to invest or learning about the different types of investment vehicles.

There’s so much to learn when it comes to personal finance, that you really can’t ever stop learning. So, if your goal is to become financially secure, have a plan to invest in your financial education.

Below are some resources you can use to improve your financial literacy.

The Total Money Makeover

The Bogleheads’ Guide to Investing

The Simple Path to Wealth: Your road map to financial independence and a rich, free life

2. TO LIVE WITHIN YOUR MEANS

You can’t talk about setting smart financial goals without talking about the importance of living within your means. Spending less than you earn is one of the smartest financial goals, yet it’s one of the most difficult to achieve

One of the major causes of financial problems is people spend more money than they earn. If you spend more money than you earn, then that money has to come from somewhere. And, that somewhere is more often than not “more debt.”

A commitment to live within your means can cause a big change in your financial life no matter how desperate your situation is. So, if you have been living beyond your means, then it’s time to scale back and start living below your means.

I know this can be a difficult goal for many of you, but it’s a good financial habit to develop if you want to avoid major financial problems, and also become financially secure.

3. TRACKING YOUR SPENDING IS A SMART FINANCIAL GOAL

Have you ever wondered where your money went? Do you feel broke before the end of the month? If you answered yes to any of these questions, then you are probably doing a bad job keeping track of your spending.

One of the best and easiest ways to maximize your income is to track your spending. When you track your spending, you can easily identify money wasters and all the unnecessary things you spend your paycheck on.

You can’t expect financial stability if you have no clue where your paycheck goes each month. It doesn’t matter how much money you earn if you can’t account for it at the end of the day.

So, start by keeping a close watch on your finances. Track your spending for a week or a month to see where your money goes. At the end of this period, ask yourself “am I happy with the way I spent my money?”

If you are unhappy with your spending, then make a plan to change your spending habits. Bad spending habits can prevent you from reaching your financial goals, so you want to take this very seriously.

You can use a spending tracker notebook to keep track of all your expenses and how you spend your money.

4. SAVE A PERCENTAGE OF YOUR INCOME

Now, I could tell you to save ten percent or twenty percent of all your income, however, since I don’t know your current financial situation, I will leave it to you to figure out what percentage of your income you can save every month.

What I will say is that the more money you can save, the quicker you will get to financial stability. So, think about that before you decide how much to save.

Saving a percentage of your income is one of the most important smart financial goals you can set. Your savings can serve as a buffer during tough economic times and can prevent you from going into debt or falling deeper into debt.

If you are not a regular saver, saving a portion of your income should be one of the first financial goals you set this year. Don’t worry about not being able to save ten percent or twenty percent. You can start with one percent and work towards increasing that as your circumstances change.

5. STOP IMPULSE BUYING

This one can be pretty hard for those of you who shop without a shopping list. I can’t tell you how many times I went into a shop for one or two items and came out with a full cart. That’s what impulse buying is all about and it can be pretty harmful to your finances.

So, one of your goals, if you desire financial stability, is to stop spending impulsively and compulsively. Plan out your shopping and spending. Only buy things you have planned for and thought about. Yes, you may have to take some steps to help you accomplish this. For example, going out without your wallet, waiting a few days to make a buying decision, or following a strict budget.

Do whatever you need to as long as you stop buying things impulsively.

6. EMBRACE BUDGETING OR A SPENDING PLAN

Budgeting is one of those things that never seems to go away. Unfortunately, you can’t get ahead financially without a budget or some sort of spending plan. Sorry, I don’t make the rules.

Seriously though, budgeting is a great tool that will help you stay on track financially. If you don’t like living with a budget or think they are too restrictive, you can create a spending plan that includes a margin for some fun.

I know from experience that following a strict budget can get boring fast, so allow some leeway for some fun as long as it’s within reason and you can afford it.

But, if you are in really bad shape financially, “fun money” shouldn’t be a priority at this time. Your focus should be on getting back from the financial edge and achieving some financial stability.

So, go ahead and create a simple budget. A budget is a breakdown of all your income and expenses. You can find some common budget categories here, but your budget might be different.

You can also use budget planners, if you find that more convenient.

7. EARNING MORE MONEY IS ONE OF THE BEST SMART MONEY GOALS

Increasing your income can help you achieve your financial goals quicker, but I know this isn’t possible for everyone especially during poor economic conditions. But, I am just throwing this out there because I know some of you are capable of making more money.

If you have an opportunity to increase your income, I want to encourage you to do so. You can increase your income by working overtime, negotiating a pay raise, taking on a second part-time job, starting a side hustle or business, or a combination of any of these ideas.

The major benefit of increasing your income is, you can save more money, pay off debt (if you have them), save for retirement, and have more money to give to important causes.

As you can see, earning more money is one of the best smart money goals out there.

8. LEARN FRUGALITY

Frugality is one of those words you hear that make you cringe. When some people hear frugality, they immediately think of cheap. But, nothing could be further from the truth. Frugality definitely doesn’t mean cheap.

So, if frugality isn’t synonymous with cheap, then what is it? Being frugal is all about getting the best deals you can get, stretching your dollar, and making wise financial choices. Now, that isn’t too bad, is it?

Embracing frugality can save you a ton of money while cutting down on your expenses. That means you can achieve financial security faster.

Below are some examples of frugality you can adopt into your lifestyle.

  • Downsize your home
  • Downsize your cars or go with one car
  • Eat out less often
  • Buy good quality used items instead of cheap crap
  • Rent instead of buy (uh-hu)
  • Pack your lunch to work
  • Make your own coffee
  • Cut out cable
  • Drink more water instead of juices and other beverages

Now there are many more ways to be frugal, but the list above should give you an idea of how you can save more money and reduce your expenses.

9. PAY DOWN DEBT

Your smart financial goals aren’t complete without a plan to pay down debt. Becoming debt-free should be at the top of your list if you are serious about becoming financially stable.

Debt makes it harder for you to achieve your financial goals because you keep using a percentage of your income to service them. So, make paying off debt a priority for you.

Start with your smallest debts or the ones with the highest interest rates. It doesn’t really matter which method you choose (though I prefer the snowball method because I like the momentum it gives when you see small debts paid off).

So, come up with a debt repayment plan, and start chipping away at your debt. Don’t put it off any longer because it’s actually an emergency.

10. SET A GOAL TO REDUCE YOUR EXPENSES

Whether it’s slashing your grocery bill, cutting off the cable, using your local library more, or making your home more energy-efficient, so you can save on your electric bill, reducing your expenses is definitely a worthy goal for you to set.

Setting smart financial goals is all about making decisions that will have a huge impact on your finances. So, look around you, what can you slash that will make a big difference to your finances?

Where can you save $100 or $500 a month or a year? These are the kinds of changes you should be looking to make. Big and bold changes that can really turn your financial life around.

11. START INVESTING FOR RETIREMENT

If you haven’t started saving for retirement, now is a good time to start thinking about it. Far too many people enter retirement with little or nothing saved, no wonder the poverty rate for retired folks in the United States is almost ten percent.

Many people don’t plan for retirement for one reason or the other, but this can be pretty costly in the end. So, if you are still fairly young, this is something you want to think about. Time and amount invested are two of the biggest factors that affect how much retirement savings you end up with.

Now, if you don’t know anything about investing, the first thing you want to do is educate yourself about how investing works before you dive in. For most people, the easiest way to start saving for retirement is to sign up for their employer-sponsored savings¬†plans¬†such as 401(k) and Roth 401(k).

If you are an employee, you can contact your HR department and inquire about the process for signing up. If you are self-employed or a small business owner, there are other options open to you as well.

The post below offers a detailed introduction to investing for beginners. Please check it out!

Investing for Beginners 101: What Is Investing and Why It Matters?

12. BUILD AN EMERGENCY FUND

Some years ago, a survey revealed that a large percentage of adults in the United States could not afford a $400 emergency. You hear that, and you think, what? But, that’s exactly the reality a lot of people are facing.

The only way to prepare for a financial emergency is to save for it. But, it’s hard to save for emergencies when you live paycheck to paycheck, that’s why you need to free yourself from that kind of lifestyle.

Living paycheck to paycheck means you are one emergency away from a financial crisis. No one should have to live like that. The only way to insulate yourself from a financial crisis is to be ready. Anticipate emergencies and plan for them.

Your emergency fund is different from your regular savings account. Ideally, this account should only be used to cover emergencies. For example, replacing a boiler, fixing a leaking roof, or a medical emergency. Expenses that are foreseeable like insurance premiums or servicing your car are not really emergencies. You should include them in your budget and set some money aside every month to cover them.

An emergency fund will stop you from getting into debt or getting deeper into debt, so make it a priority and one of your major goals.

HOW TO ACHIEVE YOUR SMART FINANCIAL GOALS

While setting smart financial goals is the first step to achieving your goals, you shouldn’t stop there. You need to come up with a plan to achieve your goals. Here are some guidelines to help you create a plan.

  • Your goals should be specific and measurable. For example, don’t say, “I will save lots of money at the end of the year.” A better way is to say, “my goal is to save $6000 in one year. I plan to accomplish this by saving $500 every month.”
  • Smart financial goals are realistic and achievable. If you are not used to saving money or have a lot of debt, it’s unrealistic to set a goal to save $10,000 in six months. Smart money goals are achievable only if you have the capability and resources to pull them off.
  • Your smart financial goals should be time-bound. Meaning, they should have a start and end date. If your goals are not time-sensitive, you may lack the urgency and motivation to achieve them. So, ensure your goals have a start and end date.

Final thoughts on 12 Smart Financial Goals to Make You Financially Stable

There are lots of smart financial goals examples to choose from, but, the ones in this post are some of the most common ones, and they can make a big difference to your finances especially if you struggle with money management.

Setting smart financial goals is only the beginning. The next step is to create a plan, then take action. Far too many people don’t follow through on their financial goals, that’s why many continue to struggle with financial problems.

So, go ahead, pick one goal you’d like to start with and get to work.

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