5 SMART Financial Goals Everyone Should Have
This Covid-19 pandemic taught me so much. One important learning that I got from it is the importance of having a financial goal. It is through these goals that you get to secure your life and your family’s, financially.. as well as emotionally and physically. It includes having savings, emergency funds, and other sources of income from passive investments. I may have been luckier than many others when it comes to having a more secured job in the health industry, but I have close family members who have either lost their job or had to stop work for the time being. I also know of people from back home in the Philippines, who have been struggling to survive the effects of this pandemic. That is why I feel that while we’re all preparing and praying for better days to come.. this is the time to learn together about improving our financial situation. I hope this article and my other Money Matters’ posts here would help you in any way, as it is helping me now.
What are financial goals?
Financial goals are the priorities and targets you set for how you want to spend and save your money. They are not one size fits all, because everyone has different priorities. However, if you don’t set your financial goals you’ll probably be left wondering where all your money went.
For financial books available in Canada, search here..
Here are the top five financial goals that we should have to prepare us well for the challenges in life.
- Improve your financial literacy. You may read books, find articles or watch on Youtube about savings, investment and get advices from the experts. One financial adviser/ expert that I’ve been watching on Youtube is Chinkee Tan. I made it a part of my bedtime routine to watch his shows and even purchased some of his e-books on how to invest and work from home tutorials.
- Budget your money. What I did is to list down all of my monthly bills and expenses for food, basic clothing needs, vitamins/ medication needs, other necessities (only needs and not wants) and then saw where I can cut some to save some. It’s amazing to realize that one third of my monthly expenses are avoidable and not necessities like frequently going out for coffee or snacks, buying accessories or clothes for the next season just because they’re on sale. Here in Vancouver, it’s easy to get around to buy for whatever you need so hoarding or buying ahead is really not needed.
- Create an emergency fund. According to financial experts, the ideal amount to cover for emergency needs is about six to nine months of your monthly expenses. For example: 2000 cad monthly budget X 6 (months) = 12,000 cad (6 months of emergency fund) or X 9 (months) = 18,000 cad (9 months of emergency fund) As of now I’m on the 6th month of saving.
- Establish multiple streams of income. As of this writing, I’m learning about online business and have started on setting up my Facebook business page. Everyday I would watch Youtube videos on how to start working on line, opportunities on working from home and affiliate marketing. I also read and watch a lot about passive income, where to invest during Covid-19 both in the Philippines and here in Vancouver.
- Pay down debt and improve your credit score. One thing that I’m happy about myself is that, I don’t forget any due date of my credit card bills and other.recurring payments like cellphone service and car insurance and lease. I personally consider it as a mortal sin to pay an interest on missed bills payment. What worked well for me is that I have enrolled my recurring bills on auto debit through my bank and I keep track of all my credit card bills by writing them down in my journal (yep.. I’m old school), checking it at least once a week, setting an alarm on my phone for the due dates a week from deadline of payment (to give me time..) and then settling everything on time. I do not delay once I get the notification from the alarm so I wont forget about it and end up not paying within the deadline.
Experts agree that, in order to be most effective, goals should be.. SMART.
- Specific.Is it for retirement, vacation, house, business, or education?
- Measurable. Track payments and monitor your progress.
- Achievable. Must be reasonable.
- Realistic. Set yourself up for success.
- Timeframe. Set a timeline or payment schedule.
As I was contemplating on each of the goals, while thinking SMART.. I wrote down my personal goals and have set a timeline for each. Now I’m working hard on it by adjusting my spending habits and saving habits as well.
Hope this helps you in your way to financial freedom.
Check out my post about financial plans for opportunities you can take advantage of.