3 easy steps to reach your financial goals in 2022

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It’s almost a new year, and what better way to moveon past that horrible year that was 2021 than to make a plan to finally achieve your money goals? I know New Year’s Resolutions aren’t everyone’s thing, but there’s no time like the present to really dig in and make the changes you want to see in your life.

 

Seriously, you can do it, no matter how big it may seem. All you need is a plan and the persistence to see that plan through. Even if you’re not quite ready to tackle your money goals right now, the process we’re about to describe can be used at any time. So make sure to bookmark this article for help with setting your money goals and achieving them.

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Here is how to reach your money goals in 2022 and beyond.

1. Identify Your Goal

The first step of achieving any goal is to identify exactly what it is you’re trying to do. Thus, the first step to reach your money goal this year is figuring out what that money goal is, or if you have multiple goals you want to achieve. For some, money goals will come readily to mind, but others may not be so simple. You may also have many things you’d like to work on or one big thing.

 

Do you want to pay off debt? Save more of your money? Start investing? Maybe you’d like to make more money or learn new skills that will help you make more money?

 

Whatever it is, it’s important that you narrow down a goal that is both manageable and specific. It needs to be manageable so that you’ll be able to achieve it and specific so that you can track your progress and easily tell when you’ve met it. It may be helpful to start with a broad goal and then narrow it down into one or two specific goals. For instance, if your goal is to pay off debt, you could use that broad goal to identify the specific goals of paying off your credit card debt and also your auto loan.

 

Or say you want to save more money. You could then be more specific by saying you want to save $10,000 toward a down payment on a house or toward your child’s college fund. Making your goals specific will give you a definite ending point, which then allows you to make a plan to achieve it.

 

Whatever your goal, make sure it’s specific so that you know where you’re going, but also manageable so that you’ll be able to achieve it within the desired time frame.

2. Know Where You Stand

The next step to reach your money goals this year is to know where you currently stand. For instance, do you know your eight critical personal finance numbers? The goal you just set is the destination, but you must know where you’re starting from to make an effective plan for reaching your destination.

 

Going back to the example above of paying off credit card debt, we can now take it a step further by calculating exactly how much debt we have left to pay off. Now, let’s say you look at your credit card balances and see that you have $2,000 left to pay.

 

Looking at the goal of saving $10,000 for a down payment on a house, where do you currently stand? Do you already have something saved? If so, how much more do you need to save to reach your goal? Are you trying to save $10,000 additional dollars?

 

Don’t be discouraged. For some, $10,000 may be too big of a goal. The idea is to make a plan that you can achieve. Whatever you can achieve over the next year, you’ll be better than you are now.

 

Again, whatever your goal, it’s important to specifically identify the end goal (destination) as well as where you currently stand (starting point). Once you have those two points, all that’s left is to make a plan to get from the start to the destination.

3. Make a Plan

The third step to reach your money goals this year is to make a plan for getting from point A to point B. While your plan will be specific to you and your situation, there are some key things to consider when making your plan that we will discuss here.

Determine Stepping Stones

First and foremost, you will need to determine the specific steps needed to reach your goal. This can be done by breaking the larger goal down into smaller goals. Take baby steps before so you’re goal doesn’t seem overwhelming. If your goal is to pay off debt, how much will you need to set aside each month in order to reach that goal? If you want to save a specific amount, how much will you need to save monthly? How much each paycheck?

Make a Plan That Will Work for You

As you’re determining the smaller steps needed to reach the larger goal, make sure that you’re making a plan that will work for you. You would need to save about $834 a month to save $10,000 in a year. That’s a lot of money a month and may not be realistic for your situation. If you’ve run the numbers and are still set on reaching that goal, what do you need to do to make it happen? Maybe you’ll need to start a side hustle or work extra at your main job? Maybe you need to reduce your expenses?

 

Make your goals lofty but reachable.

Write Goals Down

You’ve put all this work into identifying a goal and determining the steps you need to take to reach it, but it’s also very important that you write those goals and steps down and put them in a place where you’ll see them frequently. Doing so will provide you will a frequent visual cue that will keep your goal at the forefront of your mind. Furthermore, writing something down gives you a much higher chance of remembering that thing because writing provides an extra step in our brain’s encoding process.

Set a Timeline

We’ve already vaguely hinted at timeline, but it’s worth mentioning in more detail here.

 

The larger goal, as well as the smaller steps needed to reach it, should always have a timeline attached to them so that you know just how fast you need to go to reach your destination. Setting timelines will help you stay on track and let you know when you’re off track or ahead of schedule. If you don’t have a timeline for your goals, you’ll have no way to know if you need to make adjustments along the way. Thus, the goal is the destination, your current status is the starting point, and the timeline lets you know how fast you need to go to reach your destination.

Track Your Progress

Lastly, it will be important for you to determine a way to track your progress so that you can monitor your timeline and know whether adjustments need to be made. Aside from knowing how you’re doing and whether adjustments need to be made, tracking your progress will help you stay motivated to reach your goal.

 

Using one of the tips above, tracking your progress will be especially helpful if you have a visual way to see progress. For example, you could draw a money jar and add a new layer showing your savings each month. For tracking debt payoff, you could write down a series of payments and cross them off as you make them. Whatever you choose, make sure to track your progress in a way that’s meaningful to you.

Don’t Let Hiccups Trip You Up

You’re ready to go.

 

You have your specific goal, the steps needed to achieve it, a timeline and visuals to track your progress. Things are going well but a few months in you don’t quite reach your goal for that month.

 

Don’t get discouraged! Everyone stumbles once in a while. Life happens, things change. Even the best-laid plans hit roadblocks. Things will happen, so probably the most important piece of advice we can give you for reaching your money goals this year is to never give up. Adjust the plan or timeline as needed, forgive yourself for mistakes, but never give up the larger goal. If you keep at it long enough you will reach it. Whatever may happen, persist the best you can.

 

Some other quick tips for reaching your money goals this year are:

  • Celebrate the small wins
  • Share your goals so others can help
  • Seek out help as needed
  • Adjust goals as necessary

Moral of the Story

Create a vision for your life.

 

The new year is just around the corner, and it’s the perfect time to begin tackling your money goals. What do you want to accomplish this year? Where will you be a decade from now? What do you need to do to reach your money goals this year and beyond?

 

Whatever it is, begin by establishing specific goals so you know your destination. Next, determine where you currently are, as that’s your starting point. Then, make a plan to get you to your destination. Make sure your plan is broken into stepping stones and that it works for you.

 

Remember to write your goals down, set timelines for achieving them, and track your progress. Mistakes are a matter of when, not if, so forgive yourself when you make them. Help yourself persist by celebrating the small wins, enlisting the help of your friends and family, seeking other help as needed and adjusting your plan as necessary.

 

The past is gone, and the future hasn’t happened yet. Now is the time to shape how you want that future to look. Where were you last year? Where do you see yourself next year? Next decade?

 

Now go out and do it.

 

Talk about Money Learned.

 

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This article
originally appeared on 
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Crucial lifestyle factors to consider when you set financial goals

 

“How much do you cost?” is one of the most important questions I ask my clients when advising them on the structure and planning of their wealth.

As I explain in my book, Wealth Actually, you may have $10 million in the bank but still not feel it will enable your happiness. The amount of your wealth is irrelevant if you don’t understand your costs.

When you think about wealth decisions through the lens of your costs, you’ll be better equipped to avoid the kind of spending that dilutes your resources and decreases the chances you’ll be able to accomplish your long-term financial goals.

Here are 10 factors to consider when determining what you cost:

 

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Real estate can become your largest unnecessary cost because wealthy people often buy properties as a way of benchmarking themselves against others.

It’s true that a home is an investment that will gain value, but you won’t see that benefit until you sell the property. Excessive personal real estate spending should be viewed as a form of consumption that can punch a hole in your wealth, not as an investment.

As you climb the ladder of real estate consumption, properties and expenses begin to multiply. The flat in London leads to a house in Southampton or an apartment in New York, each of which carries a tax bill, utility costs, and maintenance expenses.

 

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Education expenses begin well before college. Nanny or childcare expenses come first, followed by lessons in a variety of skills, sports and vocations.

In most major cities, private day schools run in the $30,000–$40,000 range each year. At the high school level, boarding schools are at least $50,000 annually.

Private college today costs as much as $70,000 a year for undergraduate studies.

It’s perfectly fine for wealthy individuals to bankroll their children or grandchildren’s education, so long as they remember it’s an immense financial commitment.

To help their children develop good financial habits for their children, I know some wealthy people who require their kids to assume responsibility for part of tuition.

 

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As a person ages, medical expenses may be needed to lead an active lifestyle: hip and knee replacements, pacemakers, eye surgeries and hair transplants are common.

Lifesaving expenses such as cancer treatments aren’t usually budgeted for, but they should be, especially since second opinions from the Mayo Clinic aren’t cheap.

Insurance can be useful in navigating medical expenses, but if you have a deep pocket, the medical community and the government will want to stick their hands in it.

Long-term care insurance can also help in mitigating future financial risk, but be wary of policies containing carve-outs that won’t help your individual situation.

 

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Many people see personal care expenses as part and parcel of their professions, especially those in glamour industries such as athletics, music, or acting.

I have a friend in New York who pays for $80 hair blowouts every other day. Seriously.

When it comes to body image, the pressure is intense.

Wallis Simpson is credited with saying that you can never be too rich or too thin, and judging by what is popular on television and Instagram, that’s 100 percent true.

Americans invest millions every year into gyms with the hope of getting fit.

If looking and feeling good is important to you, account for it in your spending.

 

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The wellness obsession extends into nutrition and eating. Many companies have figured out that people are willing to make good nutrition a cornerstone of their lives.

I’m a strong believer in fresh food, but look at the price tags.

From organic products to $10 superfood smoothies, the daily food bill is increasing.

Additionally, there is a feel-good philanthropic aspect to the modern marketing of health foods. You feel you’re doing good by buying at the local farmers’ market instead of the nearby supermarket, and you pay a premium for that decision.

Compounded over time, that additional expense adds up.

 

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Entertainment can have escalating levels of expenditure. This can include tickets to Broadway shows, luxury suites at stadiums and country club memberships.

There’s nothing wrong with spending money on enjoyable activities, unless those activities are accompanied by addictive behaviors that destroy wealth.

Gambling is a particularly dangerous form of entertainment because many people cannot control their gambling behaviors and habits.

Collectibles are another form of entertainment that can carry a hefty price tag. It’s fine to collect things you enjoy, from rifles to cars to comic books. Some collections may have investment attributes, but they’re typically nothing more than expensive fads.

 

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Clothing may not seem like a significant expenditure, but it can bust budgets.

Case in point: I have come across people who earmark $50,000 a month for wardrobe acquisitions to project their status and wealth. That goes quick when women buy a $7,000 dress to wear once, or men stockpile $5,000 Savile Row suits.

Celebrities and professional athletes, for example, feel they must project an image that enhances their careers and brands. Clothing expenses are rationalized as necessary.

That’s fine when money is plentiful, but what happens if the income dries up?

To look good without creating obsessive and destructive long-term spending habits, a measure of self-control and management is vital.

 

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If you are wealthy and want to experience different cuisines, that can be one of the great joys of life, so long as every meal isn’t of the high-end variety.

Dining is also a social event, but not every meal needs to end with you picking up the entire tab. True friends do not need you to try to impress them in that way.

Some foodies and wine aficionados let their hobbies turn into business ventures by purchasing a restaurant or vineyard they have no business owning.

You may think the intelligence and savvy that already brought you success and wealth can be applied to a restaurant or a winery, but that is often a fallacy.

 

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Wealth can open the door to exceptional vacations and remarkable travel experiences.

Travel can be educational or provide much-needed relaxation, but like many expenses, globetrotting becomes problematic if it becomes excessive.

People who overindulge in luxurious travel lifestyles are often indulging in escapism as much as anything else, but that escape is eating up their resources.

However, if you do plan to travel, it makes sense to do it while you’re healthy. Traveling with health challenges is less enjoyable and can be an expensive proposition. As people age, there’s typically a decline in their energy level, curiosity, and tolerance for inconvenience. Travel experiences may not be as rewarding in later years.

 

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As people graduate to higher levels of wealth, upgraded forms of transportation can be among their most pleasurable and destructive expenditures.

Private air travel is the billionaire’s crack. I think many wealthy people would send their kids to a public school before they’d give up flying private.

Cars represent far more than transportation, and this is especially the case with the wealthy, where they’re a collectible or serve as a status symbol.

Boats are fun and enjoyable, but remember this adage: the two best days for a boat owner are the day they buy the boat and the day they sell it.

This article was syndicated by MediaFeed.org.

 

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Featured Image Credit: Chinnapong / istockphoto.

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