How To Achieve Your Financial Goals In 2018
If you weren’t able to achieve your financial goals last year, then this is the perfect time for you to start the New Year right. Having a financial goal and stability isn’t only about saving money but it’s also about spending and managing your money in a way that you’re able to save it without draining and depriving yourself.
In this post, we will guide you on how to manage your finances in order to achieve your financial goals this year. It’s time for you to get your notebook and jot down some important notes.
List Down Your Cash Flow
We reiterate this process or step whenever we have the chance because most people just don’t do this. That’s why we weren’t able to manage our money properly because we keep on spending left and right without minding it. We felt that we’re only spending a little amount of money, not knowing that in the long-run, we lost our finances in the process. That’s why from today onwards, we’re going to monitor every cash flow of our saving and spending habits. List all the things you need to pay such as your bills, electric and water utilities, food, transportation, allowances, savings, insurance, etc. The moment you’ve listed them all, it’s time for you to apply this golden formula:
Income – Savings (20%) = Expenses
You need to at least allocate 20% of your income the moment you received your salary. This is to ensure that you’re able to save before you ran out your money. You can then budget what was left of your income and allocate them to your list.
Use the SMART Model to Achieve Your Goal
Now that you’re able to allocate money for your savings, you can allocate a portion of it to achieve your dream. Many of us weren’t able to accomplish our dream because it sounds too vague and we’re actually waiting for a miracle to achieve our dream. What kind of miracle we’re waiting for, you ask? For example, we wait until we’re rich enough or when we won the lottery before we buy our dream house. Tell you what, if you’re just waiting for some miracle to happen then you might need to wait forever before you can accomplish your dream.
What we’re going to teach you, instead, is the secret on how to accomplish your goals using the SMART model. This SMART model will teach you that you don’t have to wait for a miracle to accomplish your dreams. With your determination and will, you can achieve your dream. So what is the SMART model anyway? SMART stands for:
Specific
Your goals should be specific and not vague. Let’s take the example above. It’s a good goal to buy a dream house. However, that sounds too vague. How about I want to buy a house worth $24,000. Now that’s better. That’s also specific. You now have the right amount in mind to reach in order to achieve your goals.
Measurable
Now that you have a specific goal in mind, you can measure your progress or success. You can apply the Measurable model by specifying what you can save in a few months. For example, in order to break down your $24,000 dream house goal, you can measure it by saving $2,000 per month or even $1,000. In this way, you’ll be able to keep track of your progress. How much money you’ve saved so far and how much money you still need to save.
Achievable
Judging from the previous breakdown, it’s more achievable to save it this way, right? Or if not, you can even break it down to $500 or even $250/month. As long as your budget allows it.
Relevant
Now that you have an achievable goal, you can also think of creative ways to increase your savings by having another job or sideline business in order to achieve your goal faster. You don’t have to wait for a miracle to come anymore since you now have an achievable dream.
Time-bound
Let’s go back to the example above. Let’s say you’re able to save $2,000/month, you now have a tangible timetable in order to have your dream house! Just imagine you only have a year to get your dream house! Or if you want to save $1,000/month, that’s about 2 years. For $500, that’s about 4 years, and so on, so forth. This is much more achievable than just dreaming to “buy a dream house” right?
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