How to Set and Preserve Financial Goals
February 02, 2023
February 02, 2023
Knowing your short- and long-term goals is the first step to building wealth. By creating and maintaining a plan to achieve them, you can ensure you remain on track over time.
The first step in goal setting is to identify the reasons behind your desire to save money and build wealth. Knowing what you are working toward will make it easier for you to create a savings plan that fits your budget and needs.
One way you can categorize your goals is by separating them into time-based buckets:
Saving for the long-term requires consistency and commitment. To put yourself in the best position to achieve your savings goals, you should consider creating a savings plan. This can help you set aside money consistently — often automatically — and build a habit of saving. However, even though it’s important to save, you should ensure you still have the funds to cover your expected costs, such as rent, transportation and food.
In addition to setting aside funds, also consider limiting or eliminating unnecessary purchases and sources of debt. To reach your financial goals, you’ll want to prioritize saving over unnecessary spending.
Once you have a savings plan, it’s time to work toward your goals. Saving money over an extended period may be discouraging for many people, given how long it can take to see results, but it’s important to understand the importance of taking small, consistent steps on your savings journey.
Whether you’re saving up for an unforeseen emergency or a future home purchase, every dollar saved puts you closer to your goal.
Though you may be prepared to save, there are still several external factors that can affect your plan. The best approach to these challenges is to adopt a proactive mindset and stay positive. It’s impossible to be prepared for every situation, but we recommend following these tips to best preserve your savings goals:
To learn more about budgeting and setting financial goals, see more blog posts about financial education on My Home by Freddie Mac®.