Regardless of whether you live paycheck-to-paycheck or have plenty of wiggle room in your budget, it’s important to have money goals in order to pay off debt, increase your income, and save more money.
When it comes to finances, however, it’s confusing to figure out where to start. So, to help you get a jump-start on setting financial benchmarks, take a look at nine money goals to practice for the rest of your life.
1. Get Out of Debt
Getting out of debt seems like an incredibly daunting task, yet this is one of the best things you can do to maximize your money.
To start clawing your way out of debt, it’s best to set specific goals. For example, you can perhaps make double car payments until your car loan is paid off, or put an extra 25% towards your mortgage each month.
2. Save for an Emergency
Of course, you never want to deal with an emergency, such as losing a source of income or paying for an unexpected medical expense. But, unfortunately, emergencies happen, and you should make sure you’re prepared.
To do this, set up a specific bank account for your emergency fund. How much you save for emergencies is dependent on your current income and expenses. In general, it’s a good idea to have at least three to six months worth of normal expenses saved up for unexpected expenses. If you can stash away even more, then do it!
3. Invest for Retirement
This may sound like a broken record, but seriously, it is never too early to start saving for retirement. It’s estimated that millennials will need to save more than one million dollars to have a comfortable retirement.
If you haven’t started saving for retirement yet, start now. If you work for a company that offers an employer-sponsored retirement plan, get on board. Some companies even match your contribution, up to a certain percent.
If a company retirement plan isn’t an option for you, start an individual retirement account (IRA) and make regular contributions.
4. Spend Less
Everyone can use more money. And the easiest way to stash away more cash is to spend less. To do this, it’s important to be conscious of what you spend your money on. This way you can cut out unnecessary expenditures.
For example, you can pack a lunch the night before work so that you aren’t tempted to eat out the next day. Or, you can quit buying your morning coffee at expensive coffee houses and make coffee at home. You can also take advantage of sales, coupons, rewards, and promo codes so that you can avoid paying full price for your everyday items.
5. Increase Your Income
This one can be a bit scary for many people. Increasing your income generally means you’ve got to be bold and go for something bigger. Even the slightest pay raise or a new side hustle can give you some flexibility financially.
If you can do this, you’ll have more money to use on your goals like paying off debt, giving to charities, and breaking the paycheck-to-paycheck cycle.
So, consider looking for a new higher-paying job, asking for a raise, or launching that side hustle you’ve been dreaming about! If you’re still not sure how to earn extra money, there are endless, easy ways. The most common way is to get a part-time gig like driving for Uber or Lyft. This way you can set your own hours. To earn some side cash for smaller goals, try cashback credit cards or apps like Ibotta to earn extra money on everyday purchases.
6. Increase Your Insurance
Increasing coverage on your insurance can save you loads of money later on. The key is to make sure you have enough insurance in the event that you have to use it.
Bottom line, you don’t want to be left with a huge financial burden because you don’t have enough insurance, so work with an insurance agent to make sure you have the proper coverage.
7. Save for your Dreams
I don’t know about you, but I have lots of dreams that just so happen to be expensive. Specifically: I want to travel the world and own my dream home.
Although saving for your dreams may not seem like a top priority compared to other money goals, it is still important. So, even if you have to start small, start saving for your dreams right now. You owe it to yourself.
8. Break the Paycheck-to-Paycheck Cycle
Living paycheck-to-paycheck makes it harder to dig yourself out of financial emergencies.
To break this cycle, try living below your means and essentially pretending you make less money than you do. Save what is leftover each month and stash it away. It’s a good idea to be strict about your budget and even use a financial planning app to help you track what you spend. This way you’ll be more apt to stay on track and not overspend.
9. Plan to Give Back
Giving back is a wise idea as you can help other people achieve their dreams. Plus, giving to charities can provide a financial benefit to you – come tax season.
If you don’t have extra cash to donate, no worries. Donate your time and resources. For example, you can volunteer at an animal shelter, donate unwanted items to homeless shelters, or tutor underserved children.
Committing to these nine money goals can be an important part of your financial life, helping you form healthy habits, earn and save more money, and even give back to your community. So, what do you say? Are you ready to stop making excuses and start smashing those money goals?