Are you interested in goal-based financial planning?
A new year is about to start, but of course, with so many new resolutions.
In 2020 and 2021, we came to know the importance of having high-income skills. So, the new year should be the mirror of these learnings.
Every person has specific goals and strives to make the coming year better than the previous one. But according to the surveys, around 80% of people fail to meet new years’ resolutions. The failure rate is much higher, and people don’t hold their new year’s resolution.
But financial stability is of utmost importance, and you can achieve this by adopting the right approach and hitting milestones.
You achieve financial stability with goal-based financial planning. With 2022 just around the corner, the time is right to make those goals.
By reading this guide, you discover seven ways to achieve financial stability in 2022.
What Should Be Your Top 7 New Year’s Resolutions to Achieve Financial Stability?
According to a survey, around 55% of Americans believe in setting a new year resolution for financial stability in 2022. So, we are optimistic by seeing these results because it’s showing a glimpse of a better future. If you want to have a better life, accept that each new year brings a fresh start.
In simple words, it’s a great start to fulfill your money goals by improving your financial picture.
Goal-Based Financial Planning
What is goal-based financial planning?
Goal-based financial planning helps you have more control over your money by setting goals.
Some people believe goal-based financial planning only involves retirement planning. This is not true.
Goal-based financial planning delves into all areas of your financial life.
Here are some top tips that will help you make the coming year better where you achieve financial abundance.
You can’t get started with goal-based financial planning until you set some goals. Here are seven.
Pay off all debts
Debts play the most significant role, and it doesn’t let you grow further. So, if you want to take the first step towards financial abundance, then at the first step, learn to deal with the debt.
If we look at the studies and surveys, then Americans don’t have an ideal debt condition.
According to the report of the National Credit Regulator:
“There are more than 25 million active consumers in South Africa who haven’t paid their debts. It means that around 40% of people are behind on their payments.”
These stats prove that debts play a vital role in keeping you broke. It happens because you pay money on account of debt interest. So, as a new year’s resolution, you should make a strategy to deal with debts.
Moreover, use Google to know the difference between simple and annual percentage rates. These things will motivate you to pay off all debts on time.
Save as much as you can
If you are planning to start something in the future, you will surely need savings. So, make a new year’s resolution to save as much as you can.
According to the stats, around 44% of Americans are aiming to make saving their priority. The idea is to start saving, and earning doesn’t matter at all.
There are the following ways to multiply your savings:
- Start contributing to the post-retirement plan
- Open a savings account in a bank
- Start setting up an emergency fund
- Evaluate your spending habits and look for the areas where you can cut down
- Put a limit on your unnecessary spending
Later, a year from now, you will start witnessing financial abundance. The main aim is to develop a good habit to save a certain amount by the end of the year.
Learn a new skill
We are living in the 21st century, an era of high-income skills. So, after COVID, I’m sure you have understood the importance of having good skills. Thus, make a new year of learning a new skill that will help you earn extra money. You can earn money by offering freelance services.
Later, you can start a business based on these acquired skills. There are online platforms that can help in this process.
Related Reading: Best Day Jobs for Writers
Also, many entrepreneurs are learning how to fax from computer without phone line assistance. This might minimize bills.
Start investing money
If you are living paycheck to paycheck, then you can face financial instability anytime. So, apart from acquiring new skills, you should find means to invest extra money.
If we look at the stats, then despite pandemic:
- The stock market hit a record high in 2020
- Specific businesses saw a boom during COVID days
Therefore, investment is always a good idea. But before investing, cross-check all stats like your spending, income, and taxes, etc. If you work for an organization, you can take help from a paystub maker to segregate income, expenses, and taxes. Now the technology has evolved, and we only need to use it in the right way.
Consider buying a home
In the post-pandemic world, many things have changed dimensions. For instance, some industries are seeing a boom, and few are declining.
There is a golden saying: “Don’t hold cash for long term.”
So, the best way is to invest money, and there isn’t any better investment than real estate.* After the pandemic, the mortgage rate is at a record low. Thus, it’s an excellent opportunity to buy a home at a low price.
But if you don’t have enough savings, then you can apply for a loan. Apart from this, if you have served in any specific department like the military, refinancing a home is much easier.
Let’s continue goal-based financial planning.
Protect your credit score
A credit score is of utmost importance because you can’t do anything without it.
For instance, if you want to apply for a loan, then a credit score is the first thing that will attract lenders. So, it’s necessary to maintain a good score by paying off all debts on time.
Apart from this, the lender also uses a credit score to check your dependability. So, if you want to witness financial abundance in 2022, then start improving your credit score. It’s a slow process, but you can achieve a specific score by remaining consistent.
Start tax planning for 2022
Tax planning takes a lot of time and effort. So, if you have pending tax-related work, then it could create a huge problem. Some people wait a whole year thinking they can reduce the annual tax bill. But it results in missing out on opportunities. Thus, it’s better to start tax planning ahead of time.
Here are the following tips that will help you in this:
- You can reduce tax by splitting income.
- Design a financial portfolio that is tax-efficient.
- Try to cut down withholding tax from your paycheck.
- Seek professional advice if you can’t understand tax-related matters.
These are the top things that will help to make 2022 financially stable and stress-free. Money-related matters should be your priority; that’s why don’t wait for 2023 and start taking financial matters into your hands.
Goal-Based Financial Planning: FAQ
What is goal-based financial planning?
Goal-based financial planning has you examine all aspects of your finances in order to have a more financially secure future.
Conclusion: Goal Based Financial Planning
Many other small suggestions can help you to spend a stable year by saving more money.
For instance, set a resolution to:
- Pay all bills on time
- Keep credit score higher
- Cook meals instead of eating out
- Stick to the budget and avoid overspending
Moreover, always keep in mind that consistency is the key to shaping a better future for you. So, don’t get discouraged if anything goes wrong and start all over again.
Readers, please share so people wanting to have stronger control over their money discover this seven-part action plan for goal-based financial planning.
This post was contributed and made possible by the support of our readers.
*Note: The opinions contained herein solely reflect the opinions of the contributing author and not Janice Wald or Mostly Blogging.