Lifestyle

Tips for Meeting Your Long-Term Goals

It can be difficult to become completely financially independent, but you likely do not want to spend your entire life trying to pay the bills. Luckily, with a bit of planning, you can meet your long-term financial goals. There are a few ways to get started.

Creating a Contingency Plan

No one wants to think about end of life planning, but you might not be able to make your own decisions when the time comes. Now is a good time to think about these things. You will need a few legal documents so someone else can make these decisions on your behalf. You can review an end-of-life planning checklist to learn how to take care of these things.

Come Up with a Budget

It can be hard to create a spending plan and actually stick to it, but this is one of the best ways to meet your goals over time. Of course, you need to have a realistic budget that is appropriate for your needs. It’s easy on paper to cut your expenses below what is sustainable. But putting these extreme expense cuts into practice won’t work, and you may then be tempted to give up on your budget. That’s why it’s better to look over your credit card statements, bank accounts, and receipts to determine how you have actually been spending your money. Try to track every cent that is earned or spent for a month or so. You can categorize these expenses and income using software or a spreadsheet.

Depending on the software, some might download the information from your credit card and bank accounts and come up with a budget for you. This is a great starting point, and you can reevaluate it after a couple of months. You can tweak your budget as you learn to do without unnecessary things and reduce your spending in other areas. Doing it slowly makes it more sustainable.

Don’t Put Off Retirement Savings

If your job offers a retirement plan sponsored by your employer, you should take full advantage of it. You should at least try to match the contribution offered by the employer. If you do not, you are walking away from free money. And when you get a raise, it’s a good idea to contribute some of that until you are contributing the maximum you can each year. When you have maxed out your yearly contributions, you might want to look into other account types. There are also steps you can take now to cut taxes in retirement that it is smart to look into and consider.

Have an Emergency Fund

At some point, you may be facing an unexpected expense. The good news is that having an emergency fund can reduce the financial impact of these expenses. Try to have about six to 12 months of living expenses set aside. This might be hard at first, so aim for about $1,000 to $2,000 and gradually work your way up from there. As your income increases, you can build it up. Remember that this is only for emergencies, like unexpected car repairs or medical bills. You can also use these savings to live on if you lose your job.

Huynh Nguyen

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