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Six Steps to Meet Your Financial Goals

You have big dreams for your future, but dreaming is not enough. Do you want to go to school? Buy a house? Start a family? Travel?
Six Steps to Meet Your Financial Goals

You can make these dreams a reality, but you will need a detailed plan to get where you want to go. With some thought, effort and help from financial experts, you can live your dreams.

1.Naming your goals

Before you can reach your goals, you have to know exactly what they are. First, consider what makes you feel happy and secure. Having lots of money may make you feel financially secure, but if your well-paying job makes you miserable, it's not the answer. You need to plan a future that brings you personal happiness and meets your financial needs. If a family is in your future, you will want to provide for them without working 90 hours a week. Write down what you need in life to make you happy and secure. Then you know what you're working toward.

2. Getting specific

Happiness is an abstract word. Making it happen requires getting specific. How much money do you need? What type of job do you want? Will you need an expensive home or something more modest? Some people need more money than others to feel secure. You may require a job that has long-term security. Maybe you can't imagine a life without travel. All of these factors will affect how you proceed.

When you list these goals, be time specific. "I want to finish my education in three years." "I want to buy a house in five years." Having a timeline keeps you motivated.

3. Setting financial priorities

Meeting your goals requires setting financial priorities. Try splitting this list into long-term and short-term goals. If you have student loans, plan to pay them off in five years and increase your payment if necessary to make that happen. You may want to establish an educational fund for your children but have substantial credit card debt. Paying off that high interest debt should be your priority so that you can contribute more to the education fund over the coming years.

Your long-term goals are essential, but in some instances, they may conflict. You may not have enough money to save for your children's education and put money away for your retirement, both important long-term goals. While your children can take out student loans, you will be in big trouble if you have no money for your senior years. Choose which financial goals are the most urgent and give them priority.

4. Taking action

Once you have your goals and priorities straight, consult with your financial advisor for planning help.  TDECU Wealth Advisors can help you draw up a savings plan that puts you on the right path. Before you spend money, you should consider if doing so will help you achieve your goals.

Life will throw you challenges, requiring that you remain flexible. Storms can damage your home or your life status may change, so your goals may need to be adjusted. TWA can help you get through these changes and still keep you on track to realize your dreams.

5. Keep track of your expenses

One of the best ways to meet goals is to track your activity. This is as true in finance as anything else. You could start by exporting your bank statements and creating a simple spreadsheet using Google Sheets where you categorize your expenses. Some iPhone and Android apps can even connect directly to your bank account and take care of this process for you, so all you have to do is review your spending on a regular basis.

Once you have an idea of where you put your money every month, identify areas where you can reduce expenditure. This could be shopping around for cheaper household bills, eating out less, or shopping in a more budget-friendly way.

When you’ve managed to reallocate some of your monthly spending, you can funnel this cash into your goals, savings, or an emergency fund so you can stay on track with your finances.

6. Invest your money

Once you know your financial goals and priorities and you have a good handle on spending and saving, you’re ready to start investing. While it’s wise to get advice and guidance from a seasoned financial adviser, investing is also something you can tackle on your own or alongside financial advice. There is no one-size-fits-all approach.

The first thing you’ll want to do is determine your goals. Do you want to retire by age 50? Help your kids pay for college? Buy a vacation home? Getting specific helps introduce both a timeframe and the level of risk involved, considerations that will guide your investment decisions.

Next, open an investment account (or two or more — again, these decisions need to be in line with your goals) with a brokerage firm. From there, you can choose the investments (i,.e. stocks, bonds, real estate, etc.) that will best help you achieve your goals in the timeframe you’ve set for yourself and in accordance with the level of risk you’re willing to tolerate. Your options are pretty broad. When in doubt, reach out to someone more knowledgeable than you like a wealth adviser at TDECU.

Happiness and security don't just magically happen. You have to plan for them. Identifying your goals and planning ways to reach them are essential to building a solid future. TWA specializes in helping their customers construct the kind of life they want. Learn more about TWA today by clicking here.