Best Personal Financial Goals by Honeygain
An investment in knowledge pays the best interest.
Learning about personal finance is the first step towards financial freedom. For most people, creating and achieving financial goals is often difficult. Not because of their income but because they lack proper goal-setting skills.
The median household income in the U.S was $60,336 in 2017. However, an average American individual has about $38,000 in personal debt. As you can see, the figures barely add up. For most people, these figures represent an unhealthy financial cycle. If you fall under this bracket, we would like to help.
Honeygainers, here is a simple guide to personal finance for beginners. We aim to help you understand what goals you need to set, what steps you should take, and how to make some smart passive income.
What is the financial goal?
A financial goal is a financial target you set to help you manage your finances. They include:
Setting financial goals isn't just about saying you will save X amount in three months. It's about setting measures to help you achieve the desired outcome. It often involves setting budgets and letting go of certain expenses (such as eating out every day). If you are intentional with your spending, you don't have to feel like you are depriving yourself of things you love.
Benefits of setting financial goals
Goal setting is all about clarity and motivation. Setting personal finance goals allows you to:
Save up and invest in the type of lifestyle you want.
Plan for an economic downturn.
Plan for any emergencies and changing circumstances.
Plan for major purchases.
Set money aside for personal development.
The best personal financial Goals
1. Create an emergency fund
Life is often unpredictable. The least we can do is prepare for any changing circumstances and emergencies. Emergency funds are a great way to cushion yourself from any financial blow caused by accidents, job loss, medical emergencies, etc. Recent drastic changes in the job market and the economy, in general, have made emergency funds essential. They form an intermediate financial source, preventing liquidate assets or breaking investments to fund emergencies.
Your emergency fund should contain 6 to 9 months of your total monthly living expenses. To raise this amount, you could create an automatic transfer to your savings account. Additionally, you can find things within your budget to cut back on or use apps to make money online. By doing this, you can build your fund slowly and consistently without making radical changes in your life.
2. Get out of debt
I try not to borrow, first, you borrow, then you beg.
― Ernest Hemingway
Debt is often a difficult subject to tackle. But given the role it plays in our day to day lives, it necessitates discussion. Whether you are dealing with student loans or massive credit card debt, your main priority should be getting rid of it.
Our advice is:
Avoid using your credit card for items or services you can do without. After all, it's not free money. Additional charges and interest payments always accompany it.
Consider paying off your smallest debt first as you work your way to the higher ones. This will give you a sense of achievement. However, you could always start with your high rate debts to minimize any additional interest costs resulting from delayed payments.
Negotiate lower interest rates so that you aren't stuck trying to pay off large amounts of interest.
Pay more than the minimum monthly amount required, if you can.
Develop additional streams of income to help you offset your debts.
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3. Create a financial plan
The importance of financial planning can never be understated. Creating a financial plan allows you to outline your goals and your strategies for wealth creation. It makes decision making easier and justifies your daily financial moves.
While it may seem prudent to create a rigid plan, ensure it remains flexible enough to accommodate changes in circumstances. Remember that a plan that works when you are single would definitely change once you're married.
A good plan includes your:
Financial milestones such as when to buy a car or a house.
4. Budget! Budget! Budget!
No financial goal is achievable without a proper budget. Budgeting is a good hack when it comes to personal finance for beginners. It will help you allocate money towards your expenses, savings, investments, and much more. It allows you to track your spending and highlight any unnecessary expenditure.
You can use budgetary apps or go the old fashioned way and create a spreadsheet. Take note of all your incomes and expenses and check for any patterns. Once you understand your money patterns, you can make informed decisions on how to proceed.
5. Create multiple streams of income
The easiest way to achieve your goals is by making some smart passive income. Relying on your income is fine, but if the last year has taught us anything - the more money you have saved up, the better.
Creating multiple streams of income can still help you make some major money moves in a short while. You can create multiple income sources by using apps to make money online, such as our Honeygain app.
Best personal financial goals & tips by Honeygain
1. Make your financial goals more manageable by breaking them down to:
Short term goals
Long term goals
2. Revisit your goals consistently to keep track of your progress and update them.
3. Develop a smart passive income to help you achieve your goals.
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4. Shift from a scarcity to an abundance mindset.
5. Create specific goals. Being specific helps you stay focused and allows you to pinpoint your progress.
6. Keep a tight budget. Benign frugal can help you achieve your goals faster.
Creating and prioritizing your personal finance goals can be challenging. Hopefully, this article has shed some light on the steps you need to take. Remember, wishful thinking will not make your bank account match your wishes. You have to take intentional steps to make it happen.
If you need smart passive income to help you build your finances, do not forget to join the Honeygain community.
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