Want to have a successful and fulfilling life? Then you need to set money motivating goals that are SMART and achievable. And, that most definitely includes financial goals.
Without financial goals, then you won’t have a clear idea of how to spend and save your money.
Motivating Money Goals
That can prevent you from meeting both short and long-term objectives, such as the following 10 examples of motivating money goals.
1. Compiling a well-stocked emergency fund.
Life is unpredictable. You never know when the following situations may suddenly and unexpectedly pop up;
- Job loss
- Car or home repair
- Major medical or dental expenses
- Bigger-than-expected tax bill
- Unanticipated travel or relocation
- Last-minute family crisis, think funeral costs or sick pet
Despite this, Bankrate has found that fewer than 4 in 10 Americans can swing a surprise $1,000 expense. As a result, 18% would charge this on their credit card. That means they’re incurring interest making it more difficult to get out of debt.
Also, did you know that it usually takes two to six months to secure a new position if you lost your job? With that in mind, it’s suggested that you have around three to six months’ worth of expenses stashed away in a savings account reserved only for emergencies.
That may sound like a lot of money to save. But, start out small by setting aside $500 or $1,000 and building your emergency fund up from there.
2. Climbing out of debt.
A Pew study shows that 80% of Americans are strapped to debt. While often considered a nasty and vile word, not all debt is terrible. For example, your mortgage or loan to start your own business. However, debt from credit cards, student loans, and car payments should be paid off as soon as possible.
The main reason? When you’re debt-free, you’re not only in full control of your finances; you can also live the life you’ve always dreamed of. And, if you’re in a relationship, this will reduce a lot of your bickering.
Also, the money that you’re throwing towards high interest rates could be put to better use. Building an emergency fund immediately springs to mind. But, you could also use this money to put in a retirement savings account.
At the same time, getting out of debt isn’t as easy as some financial experts would make you believe. Still, it’s possible if you create a budget and stick to it. You can also try the debt snowball method or through debt consolidation.
3. Saving for retirement.
According to the RAND Corporation, 71% of Americans are adequately prepared for retirement. But, that may not be the case for younger generations. Millennials, for instance, are facing financial challenges that Boomers didn’t, like student loan debt and lower wages, that make saving more difficult.
In fact, the median retirement savings for millennials today is $23,000. And, the pandemic has only muddied the waters. Moreover, there’s still uncertainty on how much to expect from Social Security down the road.
With all that being said, if you haven’t begun putting money into your employer-sponsored 401(k) or an IRA account, then make this a priority. Not taking advantage of these are literally missing out on free money. Also, don’t forget to diversify your retirement portfolio so that it also includes a range of blue-chip and potential growth stocks, as well as bonds, index funds, and cold, hard cash.
One more thing. After you’ve maxed out your 401(k), invest in an annuity. Doing so ensures that you’ll have a guaranteed monthly income for the rest of your life.
4. Living on less than you earn.
Regardless of how much bacon you’re bringing home, this is one of the most important financial habits one can have. The main reason is that it prevents you from falling into debt and being able to pay your bills on time.
But, other benefits include;
- Being more financial freedom and security.
- No longer having stress or anxiety over money either today or tomorrow.
- Being able to build wealth.
- No longer sweating over your credit score since you aren’t relying on credit.
- Having more confidence in things like budgeting, investing, saving, and making financial decisions.
5. Increasing your 9-to-5 income.
Let’s be real. You can only cut back so far on your spending. I mean, you can become an extreme couponer and never go out to restaurants. But, you still have to eat.
That means if you’re still struggling financially, then you need to increase your cash flow. And, the first place to start is at your current job by becoming more valuable.
“Having worth is not limited to a specific job title,” says self-made millionaire Grant Cardone. “You have to think bigger than the description on your business card. There’s always someone next in line with similar or even better skills.”
“It’s going to be difficult for you to advance in life and increase your income if you don’t start to think this way,” he adds. “Creating value at your existing job is about distinguishing yourself from your job title. To be clear, I’m not suggesting you give up your current responsibilities. Far from it.”
Rather, Cardone suggests that you operate more like a business. How? By becoming “a unique proposition with the goal of exchanging something of worth.”
He also recommends that you also create multiple flows of income at your current gig. Maybe that’s working overtime or piggybacking off your existing skills. Your money motivating goals will grow closer and closer.
6. Creating multiple income streams.
If you’ve dried out your income stream at your 9-to-5, then you need to create multiple streams of income elsewhere. The obvious suggestion would be to freelance or pick up a second job, like delivering pizza on the weekend.
Personally, unless you really need the money to crawl out from serious debt or need to quickly make more money for a large purchase, such as a down payment n a car, I would go the side hustle route.
Starting a blog, selling handmade products on Etsy, building an online course, or investing in real estate comes to mind. These can be done whenever you want and will take time before you make money. However, they can lead to passive income.
7. Owning a home.
According to the U.S. Census Bureau, the median monthly mortgage payment is just over $1,500. Now, close your eyes and visualize what you could do even if you didn’t have that mortgage payment. Suddenly, traveling, retirement, or whatever other financial goals you have become translucent.
How can you realistically pay off your mortgage early? Well, here are a couple of money motivating goals/ideas to consider;
- Make extra payments — either biweekly or an extra monthly payment.
- Refinance your mortgage to secure a lower interest rate.
- Recast your mortgage where you pay a lump sum toward the principal, and the lender recalculates the new balance.
- Make lump-sum payments toward your principal.
8. Having fun.
Some people might get a kick out of tracking their investments or how much they’re saving on expenses like groceries. For many of us, though, staying focused on money goals is a challenge because it’s kind-of-a-drag.
That’s not to say that having an emergency fund or retirement savings isn’t important. It’s just that we also want to enjoy the fruits of labor, whether through hard work or self-discipline, a little bit sooner. The good news is that you can still be fiscally responsible while also enjoying your life.
Let’s say that you want to book a vacation that costs $1,000. If you don’t have the money to pay for this today, don’t use your credit card. Instead, put aside the money each month. So, if plane tickets are $300 round trip, set aside $100 per month and you can purchase them in just three months.
After that, keep on saving for things like lodging, food, and entertainment for the next seven months. Breaking it down like this makes this goal seem more manageable. And, since this gives you something to look forward to, you’ll be motivated to keep up the good work.
Also, since you committed to buying the plane tickets, you have to stay on track since there’s no turning back.
9. Investing in education.
If you’re financially able to do so, set up funds to help your kids go to college. Ideally, you’ll want to open a 529 or ESA savings account specifically for their education. Besides saving for their future, this will also avoid you having to take out a loan.
But, investing in education isn’t just about assisting your children with school. It’s also about investing in your own education. Specifically, your financial literacy.
You can do this by reading retirement books and finance blogs, following annuity experts, and even picking your financial advisor’s brain.
10. Sharing your good fortune.
Whether it’s leaving a little something to beneficiaries like your children or to charities to help those who are less fortunate, it is all about Karma. There are also tax perks and the euphoria that you experience when giving back. And, this is the ultimate affirmation that you have control over money and vice versa.
The bottom line to your money motivating goals.
Make no mistake about it. Financial keys help you make daily decisions that will shape your financial future. As such, they’re extremely important. And, if you want to make sure that you’ll meet these goals, keep them Smart, Measurable, Achievable, Realistic, and Time-based.
When you’re clear on what you want, write your money goals down so that you can always refer to them when you go off the rails. And, even if you do slip up, learn from your mistake so that you can come back to your goals even stronger than before.