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How to Manage Your Money to Achieve Your Long-Term Goals

Financial freedom can feel like a long shot to many people, especially when you consider how emergencies tend to pop up just when you’re starting to make progress. 

Imagine how it would feel if an unexpected medical or repair bill didn’t set you back. Or how nice it would be to not have to choose between an end-of-year holiday and Christmas presents. 

Money management tips may not be able to solve every problem, but understanding and applying them can make all the difference to achieve a better lifestyle. The first step is thinking differently about your money. 

Tip #1. Be Forward-Thinking and Future-Saving

Money management starts with tracking your cash. Every dollar that comes in and goes out needs to be accounted for. Create a spreadsheet or go old-school with a pen and paper, but start watching your patterns. The goal here is to monitor where your money goes. 

Experts recommend either tackling your savings with an accountability partner, who could be your spouse or a responsible friend. When you have someone to answer to, it’s more likely that you’ll stick to the plan. You can also choose from a variety of smartphone apps that will hold you accountable. 

When you’re deciding which categories to cut (e.g., entertainment, transportation, etc.), consider how much value you’re getting from each expenditure. You don’t have to give up the things that make you happy, but not all luxuries are worth the cost. Because expenditures ebb and flow, you may want to track your spending over the course of several months. 

Finally, start answering the tough questions. What would happen if you lost your job or there’s a family emergency or your car broke down? You should have a contingency plan for these. 

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Tip #2. Set a Savings Goal

Goals can be tough for people who don’t see a way out of their current situation. However, there are ways to set small goals and use those achievements to snowball toward financial freedom. If you can’t think about where you’ll be in ten years, consider ten months (or even ten days). 

As you think about what your goal really means, ask yourself if the finances support your goal. People who want to change careers should have an alternative path that will eventually pay what they want to make. They may need to save up several months of savings to cover the lean months. 

Tip #3. Have a Budget and Stick to It

The point of a budget is to create a cushion between all those unexpected expenses. The only thing predictable about these hiccups is that they’re bound to happen. Instead of pulling from your retirement or taking out a second mortgage, you can pull from your emergency fund. But you can only build up the recommended three to six months of savings if you first map out a budget. 

If you’ve followed the first two money management tips of being forward-thinking and setting a goal, it should be easier to plan a budget. If you’re feeling overwhelmed, start with calculating the small stuff. 

Spending about $20 a week on coffee is the equivalent of $1,040 a year. If your coffee isn’t worth quite that much to you, you can transfer that caffeine jolt to a home coffee maker. 

Define your budget based on your lifestyle, and set something realistic. Though we know that sticking to a budget isn’t always feasible, be mindful if and when you go off the rails. It’s perfectly acceptable to have a cheat day, but continuing on that path will only land you in the red. 

Tip #4. Be Smart about Your Purchases

The purchases you make are the bread and butter of how you manage your money. Succumbing to impulse buying will only disrupt your budget. 

A wise buyer knows how to spot good quality. Research on the products you plan to buy. Take time to read the testimonials and recommendations from customers, and check out some deals and discounts. 

Conclusion: Be in Control

Financial freedom means choosing your own destiny. And while it’s not the answer to happiness, it can certainly take a few worries off your plate. 

Whether you’re planning your kid’s college fund or next week’s grocery list, you have an opportunity to take the wheel here. And if you’re feeling extra responsible, now is a great time to consider what retirement will look like for you. If you want to know what it takes to get there, check out the 5 Ways You Should Be Planning for Retirement

 

Disclaimer: This is general information only and should not be taken as financial advice. Please speak to a Shore financial planning professional before making a decision on your home loan.

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