Success doesn’t come overnight. Having clear goals and doing as per action plans are important to get you closer to what you want.
If you have never thought much about this, here are 9 ideas of financial goals that everyone can simply implement them.
#1: Have sufficient emergency savings
There will always be unexpected expenses as you go through life.
Having emergency savings will prepare you to pay for unexpected emergencies without having to turn to credit card debt, family loan, or other borrowing options that create unnecessary stress.
Look at your monthly expenditure and set how much you can afford to put aside each month. Once you have determined the amount, automate the savings via auto debit or standing instruction.
#2: Build a better budget
Many people don’t budget because they think it’s difficult, boring, and just unnecessary. But if you don’t make an effort to budget, you’ll have no idea where your money goes month after month.
Budgeting is the most important thing you can do to be financially successful. Make a plan and learn how to stick to it.
An ideal budget system is illustrated below;
#3: Have enough insurance – But not too much
Insurance is something that everyone needs to have. Striking a balance is necessary. For you to cover well and not pay too much for the coverage that you have.
Among the strategies;
• Life insurance: ensure that you’re not buying so much that you will be worth more dead than you are alive
• Home and auto insurance: Have an MRTA and auto insurance in place so that you are adequately protected.
• Medical insurance: Medical insurance is essential. You need it the most during retirement as you have lost your employer’s health benefits .
Try to have medical insurance at least before you age 45, as the premium is still affordable.
#4: Spend on one meaningful expense that makes you happy or improve your life
Each year, I will make sure that I buy one item that excites me.
It can be going for a family trip, upgrading my wardrobe cabinets, buying a sophisticated kitchen appliance, etc.
Thinking of a trip or buying a meaningful item can boost happiness for weeks.
Related: How To Save Up For The Next Vacation
#5: Pick one or two expenses to eliminate
If your debt keeps increasing every month, then you need to have a look at your daily habits.
For instance, eating out frequently, buying expensive equipment for a new hobby, making late payments, smoking, buying too much groceries that ended up wasted, always going for shopping therapy, daily Starbucks, daily fast foods, etc.
Reducing or eliminating expenses is one way to improve your financial situation. Pick one or two expenditures you are currently paying regularly and slowly stop them.
#6: Increase Your Income
I am a believer that increasing your income is a good habit. When your income improves, it allows you to pay off your debts faster, save more, and boost your confidence.
Here are ways to increase your income;
• Ask for a raise
• Get a better paying job
• Get a promotion
• Gain a new skill
• Look for a side hustle
• Make money from your hobbies
#7: Pay off debt
Although everyone thinks debt is part of life, in reality, it is a huge problem.
“Borrowing is easy, it’s paying it back that is difficult”
One way to pay off debt is using the Debt Snowball Method. It is simple and the most effective way.
With a debt snowball, you start by paying off your smallest debt. Once you complete, you move up to paying the next smallest debt, and so on. As your debt pays off, your cash flow improves over time.
Check out the illustration as below;
#8: Save for retirement
The hard truth is no bank will give you a loan for retirement. So it’s wise to save for retirement to have a better life after work.
If you are looking to build your retirement savings this year, here are some strategies to start and continue for the following years;
• Save 10% – 15% of monthly income in Principal or ASB.
• Save RM 3k at Private Retirement Scheme (PRS).
• The easiest way to prioritize your retirement savings is to save money on an automatic basis.
#9: Take advantage of tax relief
I love tax refunds.
Irrespective whether the amount is big or not, I could spend it without feeling guilty.
Among savings and spending that you can do every year to maximize you tax relief;
• PRS – for your retirement savings
• SSPN – for your kid’s college savings
• Books – for your great mind
• Health screening – for your good health
To be successful in financial has nothing to do with luck or magic. It’s simply setting out good financial goals and having plans to achieve them.
Only you can make it happen.