You’ve decided to give up your financial goal of, say, buying a new vehicle. Or perhaps you’ve mentally prepared to forego buying an expensive gadget. A recent research by Fidelity shows that the most important financial achievement for Americans is to pay off an outstanding debt and spend less.
The only problem is you’re not clear how to make a start. If you’re really serious regarding your financial goals, you need to make a concrete plan and execute it accordingly. Doing so would be good for your financial health.
However, it’s important to check how strong you’re to make the commitment to enable yourself to reach the financial goal. In this context, it is worth quoting behavioral economist Hersh Shefrin, who says, “Figure out where you want to go and structure the path in steps that are doable so that you get where you want to go one doable step at a time.” This will bring you real financial health.
Organize your financial assets
Organize your finances. You can keep the account of your financial transactions in an orderly way. You can file the documents properly. By doing this, when required to take a decision regarding a financial transaction, you can execute it expeditiously. When you organize your things, especially financial affairs, you can find whatever you need in a jiffy.
Save at least 10%
Saving is a great source of financial resources. Saving helps you in meeting your diverse financial obligations, such as kids’ education, home loan, and the like. You may also allocate a small portion of your savings for investment for the long term.
Now the question is – how does this really work?. When you save part of your income, the surplus goes into a 401(k). 401(k) is a Plan that involves the contribution of an employee from their paycheck. You can pay it either prior to, or after paying tax. And ensure you raise the proportion of your saving a little – from 10% to 12%. And, you can realize the benefits of the surplus over time.
Set your (career) goal and work on it
Being clear about what you’re doing and what you’re looking for helps to stay focused on your goal without having to look elsewhere. Setting a clear goal would give you a sense of having completed a small portion of the project. Further, setting your goal would help you quantify the progress you make.
Your goals might include your career or other goals such as financial, educational, health, developing a positive attitude, public service and the like. It is significant to set a deadline to reach your goal.
Pay your bills on time
Studies show that people who pay bills, such as credit card bills and so on, are happier. This is because having paid the bills gives you a sense of responsibility taken care of.
Further, if you have scores of bills, ensure that you pay them within the deadline. Otherwise, you’ll end up having to pay them all in one go, which could be a time-consuming task. And it would also mean paying a large amount at the same time, which would bring you under emotional stress.
You might have to pay a late penalty as well, the amount of which you could have spent on a better thing. Also, paying your bills late would present you in poor light.
Pay for charity
You might have experienced that when you pay back, it makes you happy. Charity is one good way of doing that. Having paid for the good of the needy brings you a sense of joy.
Recent research shows that when you give charity or pay for others, you feel happy because you’ve done a great job.
Taking care of your everyday life in line with these points would make your happy. The issue is to sustain the zeal and adhere to all these points, without compromising on any front.