There is a saying that if you want to be happy in life, you tie it to a goal and not to people or things because when you have goals, it motivates you to thrive and do well.
Most people have financial goals. They aspire to have financial security in life but only few actually make an effort to really plan on how to achieve their goals.
Without a plan, a goal is just a dream.
You may not see the need to plan your finances because you feel that you are already financially stable with your work and savings.
But have you ever thought how long will your money last if you stop working now?
Maybe you are just barely living on paycheck to paycheck and there is no reason for you to plan your finances because you don’t have enough savings to account for anyway.
But have you thought about finding ways to increase your income and build your savings?
Regardless of your situation, whether you are just staring out in your career or already a successful entrepreneur, you need to plan for your financial future.
Here are the five tips on how to plan to achieve financial freedom in life:
1. Identify your financial goals
You can’t achieve your goals if you don’t know what they are.
What do you want to achieve in life? Make sure to write down on paper the things that are important for you to accomplish with corresponding timelines.
There are goals that you wish to attain in one year’s time, for example, you want to save money for travel vacation this summer or pay off your credit card debts.
There are also longer-term goals that you plan to reach in a five-to-10 year period. Let’s say, you are thinking about getting married and starting a family someday.
As exciting as it sounds, transitioning to a life-long commitment carries a significant amount of financial considerations.
You don’t only need to budget for the one-time wedding expenses but also for the recurring household expenses that will come after the marriage.
How much money do you need to save before you can say that you are ready and how long do you need to achieve this?
2. Identify the skills you need
Once you have identified your goals, you will need to plan on how to achieve it by first looking at your own personal situation.
What areas in your career do you need to improve? Do you need to learn new skills to increase your income opportunities?
There are many ways to train and develop your competencies. One is by simply reading books or taking courses online.
Perhaps, you can cut your your social media time and invest it into learning hours to be more productive.
If you have the extra money to invest, you can also take up seminars or graduate courses to upgrade your professional knowledge and qualifications.
For example, if you want to to learn more about planning your retirement or investments, you can consider attending personal financial planning course while earning the credit to become a professionally certified Registered Financial Planner.
Learning is not only about equipping yourself with additional skills. It is also about growing and transforming yourself to become a better person.
3. Identify your priorities
It is normal to have multiple financial goals but to be effective in achieving all of them, you need to prioritize which among your goals are the most important and time-sensitive.
Trying to achieve all your goals at the same time can be frustrating. Prioritize only few goals at a time. These goals can include setting a financial savings target for a specific purpose to discovering the skills you need to develop.
To help you build your confidence and gain momentum, you can start by reaching smaller goals first with the objective of creating a “snowball” effect to allow you to achieve bigger goals in your next timeline.
But be careful not to focus too much on working with smaller goals that you lose sight of the big picture.
Looking at your priority goals can help you decide what you need to prioritize now. Having fewer goals can actually help you achieve more in the long term.
4. Identify how to monitor your goals
Setting your goal for a specific timeline can help you assess your performance.
Ideally, you can review your goals every six months to see if you need to do some changes in your plan.
When you plan to reach your goal, you need to develop a to-do list to help you keep track of all your tasks. Try to spend time on tasks that will help you advance your goals with milestones.
If you are not doing well in reaching your goals after a period of time, you can decide if it is still worth pursuing. You may have to adjust your strategies or you may have to stop it and pursue another goal.
For example, if you have invested in a particular losing stock and you realized that you made the wrong decision, you may have to change your investing strategy or lower your financial target.
Sometimes, just because you have invested so much money and effort in a particular decision, taking a loss can become a difficult choice to make. Learn to accept mistakes and move on.
5. Identify your accountability partner
To become committed in achieving your goals, it will help a great deal if you can find someone who can guide and support you in your financial journey.
Your accountability partners can be your trusted confidant who can help motivate you when you need encouragement.
When you are accountable to someone, you tend to avoid making excuses for your actions and be more responsible and focused to your commitments.
You can choose someone in your family, a colleague or a long-time friend as your accountability partner. Find someone whom you can trust and get advice from when you need it.
When you make your personal intentions public by being accountable to other people, you can leverage this social pressure to perform well and make things happen.
Henry Ong, RFP, is president of Business Sense Financial Advisors. Email Henry for business advice email@example.com or follow him on Twitter @henryong888