Establishing a clear money goal is more important than you think because it sets the tone for long-term financial stability. According to areport,Americans lost an average of $1,389 per person in 2021 due to insufficient personal finance knowledge. This statistic highlights the importance of setting and achieving money goals, particularly as you approach the milestone age of 40 (and beyond).
Here are 15 money goals that can ensure your financial success before turning 40.
1. Make a Budget
Creating a balanced budget means distributing your money wisely without excessively restricting yourself. Figure out how much money comes in and decide where it should go. Prioritize expenses that need to be paid off first. By doing this, you ensure that you live within your means – not spending more than you can handle and hopefully putting away some savings too.
2. Create an Emergency Savings Fund
Life throws surprises at everyone without any prior notice (and usually at the worst times). An emergency fund prevents you from falling into debt if something unexpected happens. It’s a savings account where you set aside some money from your income to cover your living expenses for three to six months so that you can live comfortably for a few months in case you lose your job or any other emergency.
3. Regular Contribution to Retirement Accounts
It is suggested that you contribute 10% of your income to your retirement account. It’s okay to start with a smaller percentage if you are at the beginning of your career. However, you should gradually increase your contribution to reach that 10% target before you turn 40.
You deserve to enjoy a peaceful and fulfilling life after retirement, and this is only possible when you have financial stability.
4. Manage a College Savings Plan
If you have kids or are planning to start a family, instead of splurging on expensive kids items, start a college savings plan right away.
Research and consider various savings options, such as529 college savings plans.Moreover, you can also tell your children to explore financial aid options such as scholarships, grants, work-study programs, and student loans to help cover college expenses. While it may be tempting to use retirement savings to pay for college expenses, it’s not a wise idea, so start saving for a better future.
5. Become Debt-Free
If you are in debt due to some questionable spending habits, it’s time to get out. Try to create a strategy to pay off debts with higher interest rates first – these are like the biggest rocks in your backpack. As you pay off thesedebtsone by one, you’ll finally see a light at the end of the tunnel. The lighter your backpack, the more money you’ll have for other things, like investing in an emergency fund or your retirement plan.
6. Diversify Your Investment Portfolio
When it comes to investing, diversifying your portfolio means not putting all your eggs in one basket but instead spreading your money across different types of investments, like stocks, bonds, real estate, and more. This helps lower the risk of losing money because when one investment is lost, the others might be in profit, covering your losses. Before making multiple investments, you must ensure that your general finances are in place and that you won’t go bankrupt to maintain these investments.
7. Save for Homeownership
All of us have a dream of having a place to call our own, where we can paint the walls any color we like and truly make them ours (and no one can increase your monthly rate unexpectedly like a rental). To make this dream a reality, start saving from today. First, save for the down payment; it’s the key to unlocking the door to your home. Then, create a budget where you can comfortably fit your mortgage payments. By reaching the goal step by step, you can experience the fulfillment of having your place.
8. Having Multiple Streams of Income
Who doesn’t like having a little extra money in their pocket, not just from their main job, but from some extra activities they enjoy? This is what we call a side hustle, like a partner that brings in more cash. Doing a side hustle is easier said than done. But you can make money from something that you enjoy. Are you an artist? Paint and sell. Do you have good vocals? Sing at a club. Try exploring opportunities outside your main job and diversify your experiences.
9. Keep Your Insurance in Check
To ensure your well-being, you and your loved ones need protection from various uncertainties. Keep your insurance policies updated, including life, disability, and property insurance, to protect your family’s future, income, and belongings. Appropriate health insurance must be in place to be ready to tackle any health issues that may come your way, ensuring that you don’t have to worry too much about big medical bills if your health takes a downturn.
10. Estate Planning
Estate planningisn’t just about protecting your assets; it’s also a way to provide for those you care about (spouse, kids, etc.). To start this process, create a will – a special document that outlines your wishes, making sure your belongings find their way to the right people. Additionally, designate beneficiaries for your assets who will look after what you’ve worked hard to build. It’s about leaving a thoughtful legacy, and ensuring your loved ones are taken care of, even when you’re not around.
11. Check-in With Your Financial Goals
Life, career, and economic conditions may change, and your financial goals might need some tweaking to keep up. Regular financial check-ins help ensure you’re still heading in the right direction to prevent surprises. Take a look at your goals, see how far you’ve come, and consider if any adjustments are needed.
12. Polish Your Skills and Learn New Ones
Humans always can develop and learn new skills. We must enhance ourselves to prevent being replaced or feeling bored and stagnant with life. Investing in your skills and education can help you become more valuable in the job market and also increase your ability to earn more.
13. Seek Financial Advice
To get through life’s struggles, one needs a map, some reliable companions, and expert advice. Similarly, in financial matters, you might need a mentor who has already been in your position to help you face challenges and conquer them. Additionally, your friends can prove to be helpful. You never know when you might need their insights or when they might need yours.
14. Discuss Finances Before Tying the Knot
Before you decide on wedding gowns and honeymoon destinations, be sure to talk about important aspects of life with your partner, like family planning, career goals, values and beliefs, and money expectations. Make sure that you both are on the same page and can handle the finances as a team. After all, money is a crucial aspect of life, and disagreements about it can lead to problems in a marriage.
15. Spend Where It Truly Matters
Remember, you work hard for your money, so spend it on things that mean something to you.
If you like shopping, spend on your favorite clothes and bags. If you like to spend time with your family, spend on monthly family outings or plan yearly trips to new places. Remember, you work hard for your money, so spend it on things that mean something to you and not just because it’s what you’re expected to do.
12 Culturally Acceptable Habits That Leave Americans Drowning in Debt
TheaverageAmerican household carries over $103,000 in debt, including mortgages, credit cards, and car loans. While there are various factors that contribute to this staggering number, there are also certain culturally acceptable habits that have played a major role in leaving America drowning in debt.
12 Culturally Acceptable Habits That Leave Americans Drowning in Debt
13 Savvy Ways to Save Without Missing Out
Managing finances can be challenging, especially in today’s consumerist world, where people chase trends and boost social status through spending.
Change your mindset by thinking of spending less not as deprivation- but as liberation. Every dollar you save today is securing your future, and paving the way for your financial freedom and long-term goals. This shift in perspective makes savings and investments a compelling practice rather than a sacrifice.
13 Savvy Ways to Save Without Missing Out
20 Frugal Hacks the Poor Use to Get by in Hard Times
Frugality is a skill that anyone can cultivate, regardless of their income level. Yet, when the bank account is at or near zero, people learn to scrape by with what they have. This resilience only comes from having experienced low funds firsthand.
20 Frugals Hacks the Poor Use to Get by in Hard Times
18 Ways to Stop Being a Slave to Consumerism
It’s time to break free from the cycle of consumerism and start saving big. Here are some tips on how to ditch the hamster wheel and take control of your finances.
18 Ways to Stop Being a Slave to Consumerism
Almost Nobody Knows These 19 Retirement Hacks
Planning for retirement sooner than later is essential in order to ensure a comfortable and financially stable future. Financial advisors share their top retirement hacks that many people forget to consider.
Almost Nobody Knows These 19 Retirement Hacks
Aqsa Salam
