Five Tips To Help You Achieve Your Life Goals

Money is just a tool.

The purpose of managing your money is to use that tool to meet your life goals. These may include buying a home, saving for your child’s college education, or planning for a nice retirement. Here are five tips to help you manage your money, so that you actually will achieve those life goals.

One of my goals is to travel.  I do this by using the tools listed below and getting cool travel tips from the Travel Hacking Cartel.

Set Measurable Goals

What do you want to achieve? When do you want to achieve it by? Instead of saying you want a comfortable retirement, it’s better to quantify what comfortable means to you. Is it $1 million in savings? Rather than saying you want your child to attend a good school, think about what a good school is for you. Harvard? Princeton? UCLA?

Know That Your Financial Decisions Have An Effect On Other Financial Areas

A decision to fund your child’s 529 plan may limit your ability to fund your Roth IRA. While your child may be closer to getting the education you want, this may in turn affect when and how you reach your retirement goals. In a different example, an investment in life insurance may protect your loves ones if you pass away prematurely. But it may also have tax consequences that hurt your estate plans.

Re-evaluate Your Finances Periodically

With changes in your life – such as marriage, birth of a child, home purchase, or a change in job status – your goals may also change as well. You may also need to re-evaluate items like the amount of life insurance you have.  When shopping for insurance you goal ought always to be to find cheap life insurance.  You may need to rollover a 401k, or you may need to update beneficiary forms. Revisit your plans periodically, and make necessary revisions to make sure they stay in line with your long-term goals.

Start Now Wherever You Are Financially

Don’t delay in managing your money. You don’t need to be wealthy in order to start managing your money. On the other hand, if you are wealthy, it doesn’t exclude you from needing to manage your money either. If you need to get out of debt, take steps to do so now. If you’re out of debt, begin saving for the future. By developing good financial habits such as budgeting, saving, and investing, you’ll be better prepared to meet life changes and handle emergencies. Don’t wait for a money crisis before you begin getting serious about managing your money. We can all strive to be better stewards of our resources.

Be Realistic With Your Expectations

If you’re managing your money to reach your life goals, then by definition this will be a lifelong process. As such, your situation is not likely to change overnight. Furthermore, there are certain events that are beyond your control. These include inflation, interest rates, and stock market fluctuations. These events will have an effect on your finances. And as much as I’d like to be able to pick stocks like Warren Buffett, I know I don’t have that level of expertise. If you don’t either, then have realistic expectations about the returns you’ll achieve with your investments. This isn’t to say that you should have a pessimistic outlook, however. Over the long-term past, a combination of diversification and dollar-cost averaging has shown to provide better than average investment results. Of these five tips, which one do you think you’re doing well with? Which one do you need more help with?

Article by Darren W.

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