Steps to Achieve Your Financial Goals in 2020!
Are you ready to roll up your sleeves and get to work in order to achieve your financial goals in 2020? Awesome! Then let’s get started. In this article I share 7 simple steps to achieve financial goals for 2020!
7 Simple Steps to Achieve Financial Goals
Here are 7 simple steps that you can follow to achieve your financial goals!
1. Ensure that the goal is specific and measurable.
If you are familiar with the SMART model for goal setting, then you will recognize these first two items in this heading: specific and measurable. A SMART goal is one that is:
In order for a goal to be effective, it has to be specific. So, instead of setting a goal of “I want to be financially secure,” which is not specific or measurable, a specific and also measurable goal would be “I want to have a net worth of $1.5 million dollars by the time I retire in 17 years.”
2. Make sure that the financial goal is realistic for your circumstances.
It is also necessary that the goal be something that you can actually realistically accomplish.
If you have a goal of paying off your $120,000 of massive student loan debt in five years but you make $18,000 a year at a job that you love but where there is virtually no potential for increasing your income and you can’t do overtime and aren’t willing to get an extra job or do a side hustle, then the goal isn’t really realistic—at least not without some pretty drastic changes in your circumstances.
Now, if you instead set a goal to get a job making $75,000 a year using that great degree you earned while acquiring that $120,000 in debt and then also committed to live on $15,000 a year and wait tables five days a week to earn an extra $2,000 a month and then you set a goal to have your debt paid off in 2 years, then with those numbers and assuming nothing changed, that would be a realistic (and rocking awesome!) goal.
3. Determine how soon you want to achieve the financial goal.
When trying to figure out a timeframe to accomplish your financial goals, be realistic but aggressive. If you have $35,000 in credit card debt, don’t take 7 years to get it paid off!
Instead, bust into that goal, turn your life around, and pay off that $35,000 in two years or less by getting an extra job or side hustle (or more than one), by cutting your lifestyle, by working hard and seeking a raise or promotion, by doing overtime if you can, and by finding a higher-paying job if needed.
You can wander your way into debt, but as finance guru Dave Ramsey says, you can’t really wander your way out of debt. It takes dedication, determination, discipline, and drive.
Check out these related articles:
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9 Simple Steps to Help You Finally Start Saving Your Money
4. Decide how much money you will need to save each month to achieve the financial goal.
Once you know your goal is realistic and once it’s specific and measurable and you know how soon you want to accomplish it, then you can figure out how much you need to put each month toward your goal.
If your big financial goal you are saving toward is to save a 20 percent down payment for your first home, for example, and you want to be able to buy a $150,000 home within five years, then you know that you need to save $6,000 a year, which is $500 a month.
I know that $500 a month is a significant amount of money, but it’s also definitely doable if you have a decent-paying job and minimize your spending in others areas
5. Open separate savings accounts to help you achieve your financial goals.
So that you don’t accidentally spend the money that you meant to allocate for your financial goal or goals, set up separate savings accounts so that you can set up automatic transfers from your checking account to each new savings account.
I love our online bank accounts with Capital One 360 because we have been able to set up several separate savings accounts for our various financial goals, such as fully funding a (six-month) emergency fund, purchasing another vehicle, saving for home maintenance and car maintenance, saving to replace furniture and appliances when needed, saving for vacations and gift giving, and more.
6. Display a large visual reminder of your financial goal or goals that you can update as you make progress.
A great way to help you get and stay motivated to reach your financial goals is to track your progress. You could use construction paper loops that represent every $1,000 you pay off in debt, for example, or you could use a thermometer or similar visual representation that can show your progress toward achieving your financial goal.
Tip: Download the Savings Goal Tracker below to help you get and stay motivated to achieve your financial goals!
Put that visual reminder where you will see it often (such as on the fridge door, bathroom mirror, or similarly frequently seen area), and make sure to update it frequently to show how you’re winning with your finances!
My favorite way to track or simply see at a glance our financial progress over the last few years is with an awesome free app called Personal Capital. With the app you can monitor your progress and see your investments grow over time (and also see your savings accounts and checking account balance grow as well). This personal finance app lets you see not only your balances in all of your various checking and savings accounts and for your credit cards and things like that, but it also links to your investment accounts, including your company 401(k) plans and Roth IRAs, so that you can see your complete financial picture and know your net worth at any time. It’s pretty awesome! You can sign up for a free account here!
If you are specifically working to pay off debt, get the free Debt Payoff Thermometer Tracker!
7. Celebrate milestones along the way.
In addition to having a visual indicator of your progress, you can also set up milestones along the way at specified intervals, and then do something fun to celebrate each one, such as going out for ice cream as a family, going to the movies, buying a new dress or video game, or going out to lunch or dinner.
This can be a great way to help you to be and to stay motivated to achieve your financial goals!
In the same way you would work to reach any other type of goal, sticking with the steps to achieve your financial goals takes motivation and determination.
But if you diligently follow these steps to achieve financial goals, you will be amazed at the progress you make and the financial success you achieve! Let’s work together this year to crush your financial goals! I’ here to help you every step of the way!
If appropriate, you could also share your financial goals with friends or family, and this might inspire you to be able to achieve your goals even faster than you had planned. And share them with us on the new, closed Families for Financial Freedom Facebook group. We would love to cheer you on!
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What financial goals do you have for this year? What have you found in the past helps you to achieve financial goals? Share your successes and your challenges in the comments section below! We would love to cheer you on and help you succeed!
Invitation to Share
Was there something in this article that inspired you to change something about your money? Are there ideas or tips that you feel could help others? Would you please take a minute to share this article via email or social media? I would love your help to share these principles of financial well-being. Thank you!
Join our closed Families for Financial Freedom Facebook group to get support and share ideas for how we can all improve our financial well-being by earning more, spending less, saving more, and investing more and reach our financial goals. You can do this! And we are here to help.