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Achieving financial stability is an ambition for many, but it can feel challenging to achieve. One way to help build a path toward better financial well-being is setting clear, realistic financial goals. However, deciding on a financial goal and continuously working towards it is often much easier said than done.
If you’ve struggled with financial goals in the past, you’re not alone. With 58% of Americans reporting living paycheck to paycheck, achieving a financial goal can feel out of reach for many. But, taking small steps towards your goal can ripple into meaningful, long-term financial change.
In this guide, we’ll explore the importance of setting goals, common challenges you may face, how to keep goals realistic, and ways you can stay motivated on your financial journey.
The Benefits of Setting Financial Goals
Given that 70% of Americans report feeling stressed about their personal finances, setting a financial goal may feel like you’re adding to that worry and pressure. But, setting a target can actually help relieve this stress! Clear financial goals offer a roadmap to help you achieve your desired financial outcomes, leading to a more secure and less stressful future. This sense of direction and purpose can make all the difference when it comes to handling your finances.
Setting targets can also help create a stronger sense of accountability and lead to better spending habits. How? Regularly monitoring your progress towards a goal can help you maintain a better understanding of your finances. This routine allows you to adjust your spending patterns, reallocate funds if necessary, and make more informed financial decisions.
Achieving financial goals contributes to your overall financial health and security, setting a strong foundation for long-term financial stability. For example, setting the goal of setting aside and saving money can help you prepare for unexpected expenses and life events, giving you peace of mind.
Common Challenges in Achieving Financial Goals
There are a handful of common obstacles people run into when trying to achieve their financial goals. By knowing about them, you can be prepared when they occur!
The first is not having a plan. Taking the time to “plan for your plan “can make a world of difference when it comes to managing your money. Whether you visit your local library or read a few articles, improving your financial knowledge can help you confidently make better-informed decisions. We’ll share some tips to confront this in the next section.
Another challenge is unexpected expenses, such as car repairs or medical bills. These can happen to everyone – and they can impede your progress towards your financial goals. To stay on track, it’s important to avoid being discouraged by these unforeseen costs. It’s not a matter of if, but when these bumps in the road occur. With this in mind, you can better prepare by ensuring your plan (see the above step) includes steps for covering these unexpected expenses.
Finally, it’s not hard to run into challenges staying motivated! But maintaining motivation is essential for achieving financial goals, even when progress seems slow, or setbacks occur. We’ll discuss different strategies for staying motivated and committed on your financial journey later in this article.
Tips for Setting Realistic Financial Goals
A crucial step to setting a financial goal is making sure you’re not pushing yourself to reach an impossible goal. Without setting a goal you can realistically achieve, you can end up feeling discouraged and frustrated. Setting S.M.A.R.T. financial goals ensures that your targets are well-defined and attainable.
- S – Specific
- M – Measurable
- A – Achievable
- R – Relevant
- T – Timebound
An example of a S.M.A.R.T. goal would be, “I want to start saving 5% of each paycheck for the next 6 months to put towards an emergency fund.” With this method, you can create a strong foundation for your financial goal-setting journey.
Another approach to setting realistic financial goals is attacking larger goals step by step. By breaking down large financial goals into smaller, manageable milestones you can make them less daunting and easier to achieve.
Maybe you want to save for a big vacation. Trying to save for it all at once could be intimidating. Instead, you might set your first goal as “I want to save enough to pay for my flight.” Once you’ve done that, your next goal might be, “I want to save enough to pay for a week in an Airbnb.” Smaller milestones also allow you to celebrate progress along the way, providing a sense of accomplishment and motivation.
It’s also important to keep in mind that life circumstances change, and it’s important to be flexible and adjust your goals accordingly. Regularly reassessing your financial goals can help ensure they remain aligned with your current situation and priorities.
Strategies for Staying Motivated
Imagine your journey to achieving your financial goal as a voyage. As with any trip, you’ll experience milestones along the way. Celebrating this progress, even small milestones, can help maintain motivation and boost confidence. After all, every great journey is made up of many small steps.
Now what if you didn’t have to travel alone? Finding someone who can hold you accountable can make staying on track much easier. This can be especially helpful if this person is also working towards their own goal. Whether a family member or friend, you can share your goals and hold each other accountable for progress. This support system can help you remain focused and motivated.
And what’s a journey without a destination? Let’s say you’re saving up for a beach vacation. Having an image of a tropical getaway on a mirror or wall in plain sight will be a constant reminder of what you’re working towards. Envisioning the rewards of your hard work and dedication can provide the drive needed to stay focused on your objectives.
As you proceed on your journey, tracking your progress is key. Another visual method for staying motivated is having a journal or small poster for tracking your progress. Financial therapists recommend this approach as a way to record progress in a supportive and encouraging manner – rather than just using something like a spreadsheet. Checking off small milestones can even provide your brain with small releases of dopamine helping you stay motivated further!
Putting it All Together: Creating a Roadmap to Financial Success
There are many benefits to setting realistic financial goals – creating better spending habits, regularly monitoring your finances, and reducing financial stress. And by using S.M.A.R.T. financial goals, breaking down large goals, adjusting as needed, and celebrating small wins, you’ll not only be able to set realistic financial targets, but achieve them as well.
As you start your journey, it’s important to stay focused, keep pushing forward, and be patient. And remember to take small steps as you become comfortable with adjusting your habits. Your hard work will pay off with better financial stability and peace of mind.
Taking control of your finances is easier with the array of resources and benefits that Juice cardholders have access to. If you’re already using Juice, don’t forget to download the app on your iOS or Android device to keep tabs on your earnings and expenditures. If you’re not a Juice cardholder currently, have a chat with your employer about the various perks and advantages that Juice can bring to both employees and the company as a whole!