What do you want your life to look like in 10 years? What does financial success mean to you and what does it entail? Living in a paid-off home? Retiring at 50? Buying a second home? Traveling the world? Retiring in a serene environment away from the chaos of city life?
A financial goal is something that you want to accomplish in an area of your finances. Long-term financial goals by nature are challenging because they take a good number of years to complete.
However, if you do not make a plan and start working on it now, you may never accomplish important long-term financial goals.
Here are 10 long-term financial goals that you can start on today:
Getting rid of debt ensures that you always get the most out of your finances. This means that the money you could have used to pay off the high interests or penalties could go into your savings and investment options, and still leave you with some more for spending.
Leading a debt-free life will also free your mind of the worry and stress that come with debt.
Planning early for retirement ensures that your sunset days are spent in peace, and calm. However, this is only possible if you start saving as early as now (in case you haven't started yet.
Starting to plan early gives you a proper headstart even in the event that poor health makes early retirement a necessity – if you’ve planned and prepared to retire early, then you will be ready.
Creating multiple income streams insulates you from the financial shocks of job losses, closed down businesses, huge financial emergencies, etc.
If you have an 8 to 5 job, consider working part-time, online, and make more money (side hustles)
You may not need the money now, but it could go into your retirement savings, enabling you to retire early. The extra money earned could also be used to pay off your debts.
Medical emergencies and sickness are the quickest ways to drain your savings and make you stutter with your set financial goals. While you still can, shop around the market for a premium health insurance cover.
This, together with your well-stocked emergency fund will ensure you do not run into debt whenever sickness knocks on your door.
Further, you could consider shopping around for life insurance that will provide money to your chosen beneficiary after you die. Just ensure you strike a balance so that you’re not buying too much life insurance that you’ll be worth more dead than you are alive.
A financial goal will be worth nothing unless you first set aside funds in case of an emergency such as a large medical expense or a job loss.
It is recommended to have at least three months’ worth of living expenses in your emergency fund.
Stop making large, unnecessary purchases. Be willing to use an older car model, for example, instead of buying a new one as soon as it hits the market.
Draw a bold line between your needs and wants, and do not cross it. If you can live without it, comfortably, then there is no need to buy it.
As hard as it may seem, creating a working budget and sticking to it by tracking your expenditure is the only sure way of attaining financial freedom in the long run.
You could make use of the 50/30/20 budgeting rule that restricts 50% of all regular income to essential spending (rent, transportation, utilities), 30% to wants (eating out, shopping, hobbies, entertainment), and 20% toward personal financial goals (saving or paying off debt).
Read Also: 6 Simple Steps to Create a Working Budget
After you draft a working budget and you determine the amount to place into savings, you could ask your employer to allocate a certain percentage of each paycheck to a high-yield savings account that is separate from your traditional spending account.
The reduced ease of access to the money will help you resist the urge to spend.
If you are planning to have children, or already have them, it might be prudent to start saving for their education as early as you can. As they move further up the education ladder, the cost of their education keeps going higher, and you might be at risk of running into debt or derailing your other financial goals if you do not plan as early as now.
By learning to live below your means, your income will always be in plenty to go into savings, investments, or for paying off debt.
You can have as many sources of income as you would like, but it will only make sense for your finances if you are able to live on less than you earn so that the difference can be put to better use to improve your life.
Achieving long-term financial goals takes a little more than just luck; it requires discipline, dedication, and repeated sacrifice.
When it comes to money, you can never make up for years of lost time, stemming from a lack of foresight and planning. So start working towards these goals now.