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Financial Strategy

Setting goals for your money is the first step in designing a sound financial plan. Whether you hope to save and invest enough to retire early or simply need to build up an emergency fund, the right financial strategy can strengthen your efforts in reaching those goals. If you need some direction on which tactics work best, here are 10 ways to improve your odds of achieving financial success.

1. Start With a Written Plan

Having a clear plan for your goals can keep you from going off-course. In making your plan, remember to incorporate four things:

  • A specific objective or result you want
  • A way to measure your progress towards the goal
  • A time frame for achieving your goal
  • The specific steps you need to take in order to reach your goal

That last one is especially important. Outlining each action in the process can take the guesswork out of reaching your goal. And remember to write it all down. Putting your plan in writing will mentally reinforce your commitment to following it.

2. Visualize Your Money Goals

Visualization can be a powerful tool for reaching your financial goals. There are several ways to incorporate visualization into your goal-setting strategy.

You could create a financial vision board featuring images of things that reflect your goal. Developing a mantra or meditation that reinforces your goal is another powerful visualization method. Choose one that’s specific and easy to remember, so you can repeat  it to yourself throughout the day.

3. Consider Focusing on Short-Term Goals First

You likely have both short- and long-term money goals in mind, but prioritizing shorter-term goals could give you a momentum boost. They typically require less effort so you won’t get burnt out.

For example, you may be deciding between starting to invest or paying off the last few thousand dollars you owe in student loan debt. Focusing on the debt might mean delaying your investment plans a little longer but it’s a trade-off you may be willing to make if you’re ready to ditch those loans for good.

4. Build Money Goals Into Your Budget

Financial Strategy

It’s one thing to say that you want to save a certain amount of money or pay off a certain amount of debt; it’s another to actually do it. Building your budget to be inclusive of your goals, rather than focused just on spending, will ensure you put money toward you goals consistently every month.

Try adding a separate budget category for saving if you haven’t. If you have multiple savings goals you’re working towards, you could break each one down into its own category. Assigning every dollar in your budget a task prevents it from slipping through the cracks.

5. Put Goals on Autopilot

Automation is one of the best tools for managing money and making progress on your financial plan. When you have automatic transfers scheduled from your checking account to a savings account, for instance, you can watch your money grow without doing any heavy lifting or getting tempted to spend it elsewhere.

Automation can also be beneficial if your goals involve debt repayment. Setting up biweekly automatic credit card payments can help you whittle away at the balance while limiting the likelihood of late fees or negative marks on your credit report.

6. Leverage Free Money

Employer-sponsored retirement plans and Health Savings Accounts (HSA) offer something that may seem impossible: free money. Taking advantage of matching contributions on these types of plans is a simple way to accumulate savings faster and reach your money goals sooner.

If your employer offers them, make sure you’re contributing to a sponsored retirement account and HSA. Then, check whether your employer will match your contributions. Consider raising your elective deferral rate so that you receive the full employer match.

7. Understand the Value of Time

The sooner you begin working towards your savings and investing goals, the better. For example, the best time to begin saving for retirement is as soon as you get your first job. An individual retirement account can help you grow your savings on a tax-advantaged basis whether your employer offers a plan or not.

The second best time to start pursuing a money goal is right now. The longer you wait, the less you can earn in terms of compounding interest.

8. Diversify

By diversifying your investment portfolio, you can manage risk while keeping your goals in sight. It prevents you from allocating too much of your portfolio to a certain type of security and shortchanging your return potential over time.

You can apply that same principle to your saving vehicles, too. By keeping funds in a range of high-yield savings accounts, CDs, money market accounts, tax-advantaged accounts and taxable accounts, you can achieve different rates of return with varying degrees of risk.

9. Increase Cash Flow

Financial StrategyAnother financial strategy for reaching your money goals is increasing the amount of income you have to put towards them. There are several ways to do this: asking for a raise at your current job, angling for a promotion, working a part-time job or starting a side hustle.

As you determine how to increase your income, consider which avenue would yield the highest return on investment. Working an extra 20 hours a week at a part-time gig in addition to your regular 40-hour job may not be worth the time if it only marginally raises your cash flow.

10. Get Professional Financial Advice

Sometimes it can be helpful to have an outside perspective on your money goals. If you are struggling to determine the right strategies and steps to reach your goals, consider speaking with a financial advisor.

An advisor can help you assess your current financial health and set realistic goals for the time and assets you have. And if you ever veer off-course, they can help you get back on track.

Tips for Reaching Your Financial Goals

  • Setting and achieving your money goals is not always easy. But finding the right financial advisor for you doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • Calculators can also be a useful tool for creating a financial plan. A retirement calculator, for example, can help you determine whether you’re on track to hit your goal and how much more you may need to save reach your target.

Photo credit: ©iStock.com/William_Potter, ©iStock.com/Geber86, ©iStock.com/marchmeena29

Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She's worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
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