Just like everyone else, you too age with every passing day. As the years pass by leaving you with memories of all sorts, you sure would not want to have repayment worries to go with your sweet memories. For those who realize that making a plan while young and earning is not just for the present but for the future as well, life after retirement will be comfortable.
Living life to the fullest is the essence of life. Hurting it with mismanagement of funds can lead to everlasting agony. Hence, while you are still young, have the perfect financial goals to achieve so that you don’t carry your burden into your 50s and 60s.
Have a Budget
Quick Navigate Our Tips
- Have a Budget
- Financial Goals to Achieve
- Here are some of the best financial goals to have so that you can have a perfect retirement.
- 1) Closing Your Debts 10 Years Before You Turn 50
- 2) Buy a House
- 3) Create Emergency Savings Fund
- 4) Create Savings Fund
- 5) Maximize Your Earnings
- Rules to maximize your earnings include:
- 6) Create an Investment Portfolio
Planning a budget is the first step towards making your financial goals and achieving them. It may seem an age-old recommendation and so is it. When you create your budget you plan a systematic approach to your spending thus limiting overuse of money. Some of the benefits of budgeting include:
- Helps you stay focused and motivated to stick to your budget.
- Helps you to keep a check on expenses.
- Minimizes the need to go for loan during an urgent requirement.
- Helps to assess your financial capacity and ability before taking a loan. This will help to know how much amount you can pay as repayment towards a loan thus preventing taking high-risk loans or loans during the high-risk phase.
- Saves you money for future use.
Financial Goals to Achieve
Everyone has their dreams, like owing a house, purchasing the dream car, upgrading the house for optimizing the comfort levels and a lot more. Not all of them think of financial goals to achieve before retiring. While buying a home, it may not seem too difficult to pay until you are 50 or above. However, as the years go by, you may find the balance loan too much of stress to bear. Added to this may be your credit card loans and other loans that may charge you more in interest. Having financial goals to achieve within a particular period limits your spending and speeds up your repaying process.
Here are some of the best financial goals to have so that you can have a perfect retirement.
1) Closing Your Debts 10 Years Before You Turn 50
We mean, at least, the major $2000 loans. When we say not to carry debts into your 50s, we believe you would not wait until the day before you turn 50 to close your loans. Closing your loans that take a significant share of your income much before you turn 50 will be a great way to live your post-retirement life as it will help you save more money for your future.
An exception could be home mortgage loan. Apart from this loan, clearing all debts will contribute to saving a good amount of money for a financially stable future. Make out a list of all that you owe. Place on top of the list loans with substantial interest. Start with the higher interest loans and work your way towards closing other debts with the lowest interest.
2) Buy a House
Those who have not yet purchased a home, it is the right time to do, as a postponed buying decision can lead to making repayments even as you get past 50. Well, home mortgage loans do have extended terms and may go past 50 but starting it late can make you repay almost till your retirement.
Having a home is a great way to ensure financial stability, particularly when you are above 50 and into retirement.
The home loan may not be right for all. It works for those with the ability to pay higher down payment as paying a lesser amount to higher interest rates and higher monthly installments.
3) Create Emergency Savings Fund
Bad times come without announcing. It often hits you when you are financially low. Hence, creating an emergency savings fund becomes mandatory if you look to avoid looking for loans as these loans mostly come with higher interest rates.
The best time to create emergency funds is the time you start earning. This fund can be saved in a bank and can be used when a need arises to avoid high-interest loans, which can keep you in debts even after 50.
4) Create Savings Fund
Oh, yes, you have already established an emergency savings fund and then why another savings fund? While the ultimate aim is to save for spending when in need, opening separate accounts for the same is recommended. The money you save in savings account is all the money that you have on you after calculating your expenses out of which you may allocate some towards depositing as emergency funds.
Many use savings fund for expected expenses, like paying insurance costs, regular maintenance expenses and fees and use emergency funds for any unexpected expenses. To simply put it across, you can make a down payment or 100% payment for purchasing a new car with your savings fund whereas you can use your emergency fund for unexpected car repair.
Yet another reason why you should have separate accounts for savings and emergency is that you can use your savings fund to invest and earn more whereas letting the emergency fund untouched unless there is an emergency. So, as you can see, savings fund can get you more returns whereas emergency funds should be deposited only in traditional financial institutions such as banks.
5) Maximize Your Earnings
If your work allows you time to spare, you can always spend it on earning more with a second job. To begin with, negotiate for a better pay in your existing job. If things are not favorably, you can always look out for better opportunities. Maximizing your income in your primary job is very important. If you don’t like taking up a job with someone else for additional income, start on your own. Turn your hobby or passion into a business.
Rules to maximize your earnings include:
- Make the right choice. Don’t waste your energy and time in lesser productive jobs or businesses.
- Learn the art of saying ‘no’, when you feel that something is not worth the effort.
- Be great at time management. You can earn lost money but never get back the last moment.
6) Create an Investment Portfolio
And, how do you do that? Start making smart investments. It is your savings fund that you are putting into use and hence ensure that the returns are much higher than it would have been in a bank account, that is, to say the least. Studying the market and investing your hard-earned money with caution will help you with a better outcome. The money can always be used post-retirement and you can keep earning too with the right investment.
Apart from the suggestions as mentioned above, you can find various other ways to save money for your future. Achieving your financial goals before you turn 50 may seem difficult. However, if you were to consider how life after retirement would be without proper planning, you may find the earlier option easier.