Setting financial goals is something all are encouraged to do irrespective of your earnings. Especially in this day and age, it is important to do proper financial planning. It would help if you made good money moves to secure the future for you and your family. Money goals are things you want to achieve with your finances. Reaching the point of financial independence in life is neither luck nor magic. Once a concrete plan has been drawn up and worked out how to achieve these goals, a good financial goal will become part of a habit that will make your life better than it already is, and achieving financial independence will look like doing it with automaticity pilots.
But what Money Move could you do directly? Here are twelve money steps you can take now as you prepare for life ahead:
1. Review Financial Goals
As an individual or a family set definite financial goals to help monitor your finances. Based on several factors that are related to you – your age, interests, current financial situation, and your goals – you need to develop your goals and formulate a plan to achieve them. Differentiate between short-term and long-term money goals and ensure that the short-term goals help achieve long-term financial success. Long-term goals could include saving up to build your home, increasing your retirement contribution, saving up for a vacation, or building a continual income stream. Setting a timeframe for your investments allows you to develop strategies, but a clear and realistic timeframe for the rest of your financial goals equips you with a plan for the steps you need to take to get from one to the other. Continually assess your steps to get to your set goals and have these steps and goals in writing. Examine potential hindrances to achieving these goals and how you can mitigate them. Whether you are looking to reduce debt or buy a house, you should involve your family members to get an idea of their personal financial goals.
2. Get Ready For Tax Time
Examining your tax obligation will help you determine if you have any taxation costs and then prepare to cover the cost. Additional taxation often comes from a side hustle, such as income from investment or small business operations. Early in the year, talk to a tax professional if you are unsure whether you owe the government any tax obligation. Prior knowledge of tax liability will help one to prepare for these bills beforehand. This knowledge will also aid an individual in avoiding paying too much that could chew into future financial plans.
3. Boost The Emergency Fund
The COVID-19 pandemic has shown the world that life is unpredictable. Building an emergency fund is one way to alleviate the consequences of the unpredictability of life. Several finance experts advise setting aside three or six months’ worth of expected expenditure as an emergency fund to help cover any emergency or unexpected eventuality that may come about. One can start by saving small things such as $1000 a month or less and growing the amount with time. These funds will support home expenses during tough times without going into debt. Set it a rule to part with some of your weekly or monthly earnings to the emergency fund as if you did not earn that part of income. A person can begin with 3% or 5% of every earnings and then move to 10%. This money may seem small, but, in the end, it will accumulate into some good money when the need arises.
4. Apply For Life Insurance
Life insurance often comes in handy when a person dies and leaves their loved ones behind. The pandemic resulted in many deaths across the country, bringing the discussion of life insurance value to the fore. Life has a bunch of unexpected events that can happen to a person. Applying for a life insurance policy will do the survivors a favor as they shoulder the expenses associated with a loved one’s death. Life insurance can help cover expenses such as an outstanding mortgage, higher-education expenses for the remaining dependents, or child costs for the surviving parent.
5. Embrace opportunities to earn investments and bonus cash
Instead of focusing only on investment account contribution from your salary, actively search for opportunities to improve your contributions as you gear towards financial freedom. An individual could choose to upgrade to contribution schemes such as Found Money partners. These funds generate small contributions bonuses that build up over time and could add to the family’s savings. Accounts like Acorns Spend are advantageous in ensuring the accumulation of bonuses that allow you the opportunity to plow back the returns from the account to grow your investment.
6. Re-evaluate auto insurance needs
Working home may become a new norm post-Covid-19, meaning few long car commutes. Many employers that worked successfully from home are not quick to return to where things were before the pandemic. Some of these organizations consider making work from home a permanent feature in their operation to reduce expenses and maximize profits. If you expect this year or the coming year to be a low-mileage year, re-evaluate your insurance needs so that your auto premium payment could be recalculated. The reduction could save you some cash that can then be saved or invested somewhere else.
7. Reduce housing costs
Since renting, cost and interest rates have fallen to a new time low during the pandemic. Landlords and renters have an opportunity to save some money. Renegotiate your rent payment with the landlord and save the resulting reduction for the future.
8. Automate your finances
Automating bill payments and contribution helps one stay on track and avoid overspending. You could begin with automating one expenditure and then add more with time. An individual can also automate savings, where your money comes to you after the savings are already deducted.
9. Savings diversification
Diversifying your savings can have many advantages and can help create money. Savings in CDs and stocks can increase the interest from your investment, probably higher than traditional banks’ savings. These money markets give you interest and access to cash too.
10. Debt control
Financial security goals and debts have little in common. Though there are some inevitable loans, controlling them and ensuring obligations are minimum is a money move worth making. If you have finished paying a particular debt, channel the money previously used to pay loans into your monthly savings accounts.
11. Renegotiate cable and phone bills
Regularly, check with your wireless provider if they have a new promotion that you can take advantage of to lower your bills. Sometimes you can also cut off the cable to save on your money and time if it is not used that much.
12. Set up a passive income stream
One can set up investment in a project that will make money by itself over time. You can shop for available profitable investments to put your money on for steady earnings.
The Bottom Line
Financial planning is as important as earning money itself. Financial security can be attained by proper planning, and if you take decisive actions, you can save money. The twelves money moves we have discussed can be helpful to anyone who wants to change their year towards money stability now and in the future.