Sometimes we get so caught up in what is happening right now that we forget to think about how our everyday finance habits and money choices can impact a plan for the future. What you do now can influence whether or not you meet your long-term financial goals, and it can also determine how successful you are overall.
It’s important not to think of your everyday finances as different from your financial future. You need to see the two as part of a whole, and revamp your finances so that what you do each day helps you work toward the future.
Decide What’s Important
The first step in making sure that you are on track with your plan for the future is to decide what’s important to you. What are your priorities? Think about your priorities for the short term, as well as your long term priorities. What things are most important?
Next, look at your finances. Where are you spending your money? Does your spending reflect your priorities and long term goals. Many of us, once we examine our finances, realize that some of the things we buy on a regular basis aren’t really that important. Do you really need another knick-knack? Or could that money be better spent by contributing to a tax-advantaged retirement account so that compound interest can help it grow for the future?
You might be surprised at some of the things you can do with your simple finance decisions to help you make better plans for the future.
It might seem difficult at first, but if you take the time to really look at your situation, and consider some of the tools available to help you achieve your goals, you’ll find that it is easier than you think. The first step, though, is a consciousness about your spending, and how the way you use your money each day affects your overall plan for the future.
Set Goals
I know this video looks a little “cheezy”, but it’s really about that simple! Set long term and short term financial goals. Whether you want to buy a new computer in two months, go on a nice vacation next year, or retire comfortably at age 55, you need to have specific goals. Next, use various online tools to figure out what you need to do right now to meet those goals.
The reality is that you won’t be able to accomplish what you really want if you wait until the last minute. If you want to be able to enjoy financial freedom as you prepare for the future, it’s vital that you start planning now. Prioritize your spending so that you set aside money for your long term and short term goals before you spend on frivolous things that aren’t that important to you.
Think about the lifestyle you want, and then ask yourself, before you make a purchase, “Is this helping me reach my goals? Or is it hindering me?”
In some cases, you might want to splurge a little, even if the expenditure won’t help you with your goals. In those situations, though, you do need to ask whether you will hinder your goals if you proceed to spend the money. A frivolous purchase that isn’t helping might be acceptable, but if you have to reduce the amount that goes toward reaching an important goal, you might want to reconsider.
What do you think? Do you use your everyday finance habits to help you plan for the future?
