Money is an essential part of living, so if you’re going to enjoy a lifetime of adequate supply or provision of money, then it is important to learn how to set financial goals.
Like everything else that requires setting a goal and a plan to succeed, the way you spend, invest or keep your money requires a financial goal or plan. This is essential if you genuinely want to become financially free.
Everyone wants to be wealthy. Many people work tirelessly year in and year out. Some people get themselves a side hustle to ensure that they have more money coming in regularly. Have you ever wondered why? Here’s the answer: Every human being likes and wants freedom.
Becoming wealthy allows you to buy that freedom that we desire. Have you ever heard of the term financial freedom? Well, that’s what it is all about: buying your freedom.
Buying your freedom means having the ability to choose what you want, and whenever you want it. It means that you don’t have to settle for something that you don’t like just because you don’t have the capacity to get it.
Sometimes you say that the price of an item is too expensive. The truth is that it is not that expensive, it’s just that you can’t afford it. So, yes, you like the quality but you don’t have the financial capability.
The financial capability that allows you to get the things that you truly desire is what becoming wealthy is all about. If you are going to get that result, then you need to set some financial goals and plan.
Okay, let’s get to the part you’ve been waiting for all day. What are the 4 financial goals you need to set for 2021?
1. Plan for retirement
Whether you are an entrepreneur or career person, the truth is that we will never work forever. At some point in our lives, we’ll have to retire.
Here’s the thing; the only way to live your best life even after retirement is if you plan for it. That’s where your financial goal 1 comes to play.
One financial goal everyone should start early enough in life is learning to save for retirement. When you start saving for retirement early enough, you wouldn’t need to break your neck to make a lot of money, thanks to the law of compound interest.
Compound interest occurs when interest gets added to the principal amount invested, and then the interest rate applies to the new principal amount, which is larger. It means that the earlier you started, the better.
2. Have an emergency account
One of the challenges of life is that you can’t always predict it. Things will happen from time to time that no one planned for.
For instance, if you have to deal with a broken-down vehicle or a sudden health issue, or if you lose your job suddenly, what will you do? I guess from this example you can tell why getting an emergency fund should be one of your financial goals for 2021.
An emergency fund or account is like a financial safety net for future mishaps or unexpected expenses.
To create one, consider saving at least, six months’ worth of living expenses in a separate account tagged emergency fund.
3. Focus on your assets sheet
What makes rich people get richer by the day is that rich folks invest a lot in assets instead of liabilities.
To grow your wealth, you need to learn how to get your inflow or income higher than your outflow or expenses. To do this, you have to create a financial goal and plan that allows you to grow your asset column.
The definition of an asset is anything that brings value. So, it could be a landed property, a car, a business, an investment, etc. As long as it is bringing in some financial value, then it is an asset.
4. Live below your income
Finally, I know it is tempting to show people how much money you have, and the things you can afford, but it’s never a wise idea to please people by spending so much money to prove to them that you are rich. It’s not worth it.
So, if you don’t need that fancy car, then ditch it. If you don’t need a 4-bedroom apartment, go for a 2-bedroom. The idea is to live below your means so that you can limit your expenses and improve your assets column.
That’s it, guys!
Set smart financial goals, and enjoy an incredible year of financial breakthrough.