How to Create Investment Goals

When it comes to investing, goal-setting is a vital step toward achieving financial success. Achievable goals can help you narrow your focus, stay motivated, and create a plan. In this article, you will learn the importance of goals and the steps to take.

#1: DETERMINE YOUR GOALS

Start by determining exactly what you want to achieve. Common investing goals include saving up for child’s education, retirement, and a house. Good investment goals need to be SMART. SMART stands for the following:

Specific: Setting a specific financial goal requires laying out the purpose for why you want to save.

Measurable: Financial goals need to be easily measured to help you assess your progress.

Achievable: Setting goals that are not achievable can diminish your motivation and steer you away from your path.

Relevant: A good investment goal should align with your values and beliefs.

Time-Bound: Calculate how much you need to save monthly or weekly to achieve your investment goal by providing a sense of urgency.

#2: SELECT YOUR INVESTMENT STRATEGY

According to the Financial Industry Regulatory Authority (FINRA), there are different types of goals such as short-term, mid-term, and long-term. Short-term goals can be achieved in less than three years and may be suited to liquid investments such as cash and money market accounts. Mid-term goals that can take up to ten years can be allocated to balancing your portfolio, fixed-income investments, and stocks.

Lastly, long-term goals that can last more than ten years can take a more aggressive approach such as investing in stocks, mutual funds, and exchange-traded funds.

#3: TAKE SMALL STEPS

New investors and those who are more risk-averse can start small to get a better understanding of the process. Adjustment to the investor’s approach can make goals more realistic and achievable.

#4: SEEK PROFESSIONAL SUPPORT

Countless social media pages and credible blogs provide financial advice about investing and other topics. Many investing platforms have educational resources on their website. It is up to you to do your research and seek professional support when needed.

BOTTOM LINE

Assess your investment goals as early as possible to avoid difficulties and complications. Planning and execution of your investment processes require a level of discipline and commitment. Start small if the process feels overwhelming and watch your nest grow.

Sources: 1 & 2

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How Can You Stop Living Paycheck to Paycheck?

Living from paycheck to paycheck can cause stress, especially when you cannot cover all your needs and wants on a monthly basis. Constantly scrambling to make ends meet can feel like running on an endless financial treadmill.

A combination of practical strategies and a positive attitude can help you make real progress. The most crucial step is to start – now!

#1: EXPECT THE UNEXPECTED

When you are struggling to pay for all your current expenses, it can seem impossible to put anything aside for your future. However, unforeseen circumstances can happen anytime. Job loss or accidents could put you in a bigger financial trap. Cushion these circumstances by building and emergency fund.

While people usually put six months’ worth of expenses in their rainy-day fund, you can aim for saving at least S$1,000 first. Even if you start with just S$50 per paycheck, you will become more confident in managing your finances as time passes.

#2: CREATE A REALISTIC BUDGET

Be honest! Do you know where all your money goes to? If you are merely paying for the incoming bills and ensuring that everyone is fed, you may not have a system in place. When you have a budget, you can easily monitor where your money goes and where it should be.

A budget also uncovers your spending habits. Examine these spending habits to make necessary changes. Cutting down on non-essential expenses can help save money for your future.

#3: TACKLE THE FOUR WALLS

According to financial author Dave Ramsey, you must take care of your Four Walls first. These fundamental walls include food, utilities, shelter, and transportation. Put these on the top of your budget priorities and write down other categories that you need to pay for. List these categories based on their importance.

Image Credits: pixabay.com

When you run out of money, that is it. Stop spending!

#4: LIVE BELOW YOUR MEANS

Don’t get a part-time gig to keep living a lifestyle that you can’t afford! Increasing your income streams can help with your situation, but you must be responsible with your money. Remember why you took on that additional job in the first place.

Seek the help of others to ensure that you are not tempted to spend your extra money. Stay intentional and stick to your budget.

#5: AVOID THE CREDIT CARDS

Are you trapped in a mountain of debt? Well, you won’t get out of it if you continue using your credit cards.

As much as possible, avoid using your credit cards until you are completely out of debt. This will help you control your spending. If you lack the willpower, eliminate all your credit cards except for one. Put all your credit on this card and pay off the minimum each month (on time).

#6: BE PATIENT

Getting out of this situation can’t be achieved overnight! Start with small positive steps toward money management. Think of money that you can save and watch it add up. This process takes time and commitment, but you can do it.

Image Credits: pixabay.com

Just have the courage to start now!

Sources: 1 & 2

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5 Ways to Improve Your Personal Finances

Many believe that only business owners need to have financial literacy in order to pay taxes, fulfil day to day accounting needs, etc. What they fail to recognise is that these businesses have numerous resources to support their financial needs, if it’s a large scale business or a startup they are sure to find the right MYOB pricing, or a different resource that’s well priced. However, because of this many overlook how essential financial literacy is even for individuals, and there are much fewer resources to manage personal finances, making it absolutely necessary to at least understand the basics to fulfil the individual needs. Reinstating the importance of finance in financial literacy and personal finance are both very important aspects of your life, and improving them can benefit you in many ways, such as helping you make informed decisions about how to handle your money, reducing the stress and anxiety you feel when it comes to your finances, and even helping you to earn more money in the future as a result of having more knowledge about your money. Here are five ways that you can improve your personal finances so that you can be better off financially in the future.

5 Ways To Improve Your Personal Finance

1) Calculate your net worth

Net worth is a big picture number that is an excellent starting point for your financial literacy. You can calculate it by taking your total assets and subtracting your total liabilities. When you start investing, look into how each investment affects your net worth; at a glance, you’ll see if you’re building wealth in one area while draining it in another (or if your investments are actually adding to your net worth). Also consider using personal finance apps like Mint or YNAB that track all of these numbers for you automatically—at least as an easy way to check up on yourself. They’ll help reinforce financial goals, keep you accountable, and alert you when things aren’t going so well.

2) Check your credit score

Before you set out to improve your personal finances, get a credit score. There are numerous ways to check your score, but it’s best if you do so with a reputed credit agency in your location. Remember that your score will differ at each agency, so make sure you check with a variety of places before taking any action on improving your scores. Once you have a firm grasp on where you stand with credit rating agencies and what it takes to improve those numbers, set about establishing financial literacy for yourself. A few ways you can start is by reading financial journals, books, or even listening to podcasts surrounding wealth.

3) Create a budget

Without a budget, you may be tempted to spend beyond your means and dig yourself into debt. Creating a budget and sticking to it will help you gain a greater degree of financial literacy and ultimately save you money. It’s hard, but setting up a budget is essential for anyone trying to take control of their personal finances, and it’s been a practice ever since the time of ancient Babylonians. There are plenty of great resources online (and elsewhere) that can guide you as you start or manage your first budget. A simple Google search should yield enough material for hours of work; when you’re done, not only will your finances be in better shape, but also so will your mind-set.

4) Create an emergency fund

Everyone should have an emergency fund. This is money that you can access easily in case of financial disaster, such as a job loss or illness. An emergency fund can be invaluable for keeping your finances on track when life happens. The average length of unemployment is four months, so having three months’ worth of expenses set aside in an easy-to-access account will keep you from racking up debt while looking for a new job. Many utilise their pension plans or 401Ks as emergency funds, however, having a separate account specifically to save up for emergencies can be beneficial. In a bank opening a high yield savings account can definitely help some, or maybe you need to get an insurance plan. Ultimately, your emergency fund should work for you both right now and in the long run.

5) Analyse your spending patterns

Keeping track of your spending is probably one of the most effective ways to improve your personal finances. It helps you see where you’re wasting money and gives you an idea of what sort of budget categories are most important. Once you have a grasp on your spending, it’s easier to make changes. For example, if entertainment is eating up too much of your budget, there are lots of cheap or free alternatives (think public parks) that can help save money while still providing a pleasant experience. If you’re looking for more specific advice, try searching for personal finance software or visit one of many personal finance blogs on any topic that interests you. Analysing your spending can also help you discover specific patterns about yourself such as what actually drives your spending, which can heavily impact your overall life.

In today’s world having your personal finance in check is important, especially with all the uncertainties and the rising costs of even essential products. The earlier you start in your personal finance journey, the better.

 

 

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Surefire Ways to Make Your Money Work for You

Money is a strong tool that can help you achieve your goals. It can provide stability for your family and allow you to save towards important milestones. To achieve these things, you must know how to make your money work for you.

Making money work for you pertains to using money to make more of it. Your financial decisions can guide you through this. Start by learning how to budget!

#1: LEARN TO BUDGET

Change the way you handle money by budgeting. When you are budgeting, you become more purposeful about where you spend your money on. You are making money do what you desire, rather than spending it without a plan.

Budgeting includes prioritizing your spending, avoiding new debt, paying off debt, identifying harmful financial habits, reducing your spending, and saving for the future. You may need to adjust your budget from time to time.

#2: ELIMINATE DEBT

Debt means your money is not working for you. Your money is going towards paying the interest. Debt creates limitations and financial burdens.

Paying off debt allows you to redirect your funds towards things that are important to you. For instance, you can save up for graduate studies or create your retirement fund. You can begin investing money and allow your wealth to grow.

#3: SAVE AND INVEST

Once you have freed yourself from debt and have extra cash, you can put your money to work by saving and investing. The amount that you will save will depend on your lifestyle, age, and goals.

In addition to having an emergency fund, you will also need to have a retirement fund. You should also consider having the following:

a. education savings
b. travel fund
c. down payment for a house
d. business capital
e. car fund
f. long-term savings for you and your dependents

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Lastly, investing in yourself is one of the best investments you can make. While you might not be able to pinpoint an actualized return on investment, you will eventually see the results in time.

Source: 1

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10 Steps To Reach Financial Wellness

Financial wellness refers to effectively managing your economic life. This concept surrounds many factors such as spending within one’s means, being financially prepared for emergencies, having a concrete plan, and having access to tools necessary to make good money decisions.

Financial security is the underlying concept of financial wellness. To help you reach financial wellness, you may start by following these steps.

STEP 1: COMMIT TO CHANGE

The first step in developing a financial plan is to determine your attitudes and beliefs about money. Be honest with yourself. Are you ready to accept the responsibility of improving your financial situation? Do you believe that you can change the way you behave towards money?

STEP 2: EXAMINE YOUR FINANCES

Examine your finances by looking at your previous statements and tracking your spending. This will give you an overview of how you are doing financially. Identify your strengths and weaknesses when it comes to managing your money. Write down your findings and feelings.

STEP 3: SET YOURSELF UP FOR SUCCESS

Choose a trusted person to conduct the day-to-day financial tasks to stay on top of things. The appointed person must be a good communicator and an organized individual. Give him or her uninterrupted time to do financial tasks effectively.

STEP 4: GET COPIES OF YOUR CREDIT REPORTS

A credit report is a compilation of your credit payment history collected across all your banks. It includes valuable information such as basic personal profile, closed credit accounts, aggregated credit limits, and aggregated outstanding balances. Credit reports provide a snapshot of your overall situation.

For licensed moneylenders, the Moneylenders Credit Bureau is the central repository of data on borrowers’ loans and repayment records. For banks and finance companies, only two credit bureaus are allowed to obtain such information in Singapore. These are Credit Bureau Singapore and Experian Credit Bureau Singapore.

Credit reports are issued by a credit bureau to banks and finance companies when they make inquiries about the client. These companies assess your creditworthiness by looking at the credit score. You can also request a copy of your report from the bureaus. Reviewing your credit reports can help you identify errors or fraudulent activities.

STEP 5: KNOW YOUR STARTING POINT

Know your starting point by calculating your net worth. Compare what you owe (liabilities) with what you own (assets). Do seek professional help when necessary.

Image Credits: unsplash.com

STEP 6: IDENTIFY YOUR INCOME

To have an accurate picture of what you can earn in the future, you can observe your previous income. Decide whether you are going to expand your income by using different streams or if you are going to stick with your current income source.

STEP 7: REVIEW YOUR DEBTS

Freedom from debt is an achievable goal. The first step to regaining control is to take a transparent look at your existing obligations. Regardless of which financial method you use, be patient and persistent when paying your debts.

STEP 8: SET YOUR PRIORITIES

Create a list of your needs and wants to help you establish your financial priorities. Financial priorities may include saving three months’ worth of expenses or saving S$3,000 for a year to fund your family vacation.

STEP 9: HAVE SMART FINANCIAL GOALS

By setting your financial goals, you are providing yourself with something to aim for. Simply remember that financial goals need to be SMART.

S – pecific
M – easurable
A – chievable
R – ealistic
T – imely

STEP 10: SECURE YOUR FINANCIAL FUTURE

Look at your retirement plan and make some necessary changes. Do not despair if you are behind on your retirement goals. You are not alone! Studies show that many households are not prepared for retirement. Fortunately for you, you can improve your situation.

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Start now!

Sources: 1, 2, & 3

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