Building a strong foundation for the future and planning for the unexpected is essential. This post will look at how you can build that financial foundation and prepare for the unexpected so you can be comfortable in your old age, even if things don’t go according to plan.
Set realistic goals.
Before you set any goals, it’s important to determine if they are realistic. Achieving a goal that is too ambitious will only increase the likelihood of failure while achieving a goal that is too easy will fail to motivate. Additionally, setting goals so far in the future or past that they become irrelevant can be a detriment as well. To ensure success and avoid these pitfalls, make sure to keep your goals realistic by keeping them small enough but still challenging enough:
- Start with one or two steps at first (e.g., pay off credit cards) before moving on to bigger projects (e.g., investing).
- Aim for five-year goals over ten-year ones; this gives you frequent checkpoints without putting off what needs to be done now!
Make a budget.
It’s important to make a budget, but how do you actually go about doing that? First, figure out your income and expenses. Next, determine how much money you have left over after paying your bills and living expenses. This is the amount of money you have for discretionary spending—the stuff you get to spend on whatever you want! Now that you have a clearer picture of what’s going on with your finances, it’s time to set goals for saving and spending money.
Earn more money.
The best way to make money quick is through a job. If you’re currently employed, then try to find a job that pays better. If you need a new gig, look for opportunities at different companies in your area or even some online businesses. You should also consider getting an additional degree or certification if it means that you can get paid more for what you do now. While no one wants to work themselves into the ground, sometimes the only way out of debt and into financial security is by working hard and making sacrifices necessary to achieve those goals.
Reduce your debt.
Reducing your debt can be a good way to build a strong financial foundation for the future. For example, if you have credit card debt or student loans, these are things you’ll want to pay off as quickly as possible in order to keep from paying interest on them.
If you have a mortgage on your home or car loans, these should be paid off before retirement so that there’s no worry about being able to pay them back after retirement. However, if there are other debts such as personal loans that aren’t related to real estate or vehicles (or aren’t secured by real estate), they should also be paid off before retirement.
Increase your savings.
The next step is to increase your savings, maybe saving 10% of your income each month, but if that’s not possible at first, start with 5%. The important thing is that you save consistently and regularly. If you are able to increase it later on, great! But don’t make it an excuse not to save any money at all—that will only set you back even further when your financial goals come into focus.
Now, you know how to build a strong financial foundation for the future. The key takeaway is that it’s never too early (or late!) to start taking control of your finances. Whether you’re just starting out in your career or have been working for decades, these tips will help you reach your goals and make sure that tomorrow is even brighter than today.
About the Author
Monica is a passionate writer and content creator. Her interests include outdoor activities, fitness, technology, entrepreneurship and everything in between. Say hi to Monica on Twitter @monical_lee.