In today’s blog post I share 10 personal finance goals to help you create a solid financial foundation that will set us up for success, both now and in the future.
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The first quarter of 2023 is almost over! Can you believe it? Time really does fly, doesn’t it? But just because we’re a few months into the year doesn’t mean it’s too late to start setting personal finance goals for 2023. In fact, it’s the perfect time to take stock of where we are and make a plan for where we want to be financially by the end of the year. In this article I share practical advice on how to set SMART financial goals.
As mums, we have a lot on our plates, from taking care of our families to managing our households, and sometimes our own financial goals can get pushed to the side. But it’s important to prioritise our own financial health so that we can provide the best for our families and feel secure in our own futures.
So, let’s take a deep breath and commit to making 2023 the year we take control of our finances. With these 10 personal finance goals, we’ll be able to create a solid financial foundation that will set us up for success, both now and in the future. Let’s dive in!
1)Budgeting: Your Financial Tetris Game
Budgeting is the foundation of financial success. It may not be the most exciting topic, but it’s crucial for achieving your financial goals. I like to think of budgeting as a game of Tetris. You need to fit all the pieces together to make it work. But instead of blocks, you’re fitting in your expenses and income. It may take some time to get the hang of it, but once you do, it’s smooth sailing. Here’s the zero-based budget template that I like to use to manage my budget monthly.
An alternative way to make budgeting more manageable is to use a budgeting app or physical budget planner. There are many great options out there, like Money Dashboard and Emma or, which can help you track your spending and create a budget. These apps can also alert you when you’re nearing your budget limits, which can help you avoid overspending.
2) Emergency Funds: Your Financial Safety Net
Life can be unpredictable, and you never know when an unexpected expense may pop up. That’s why it’s essential to have an emergency fund. I once had to pay for a new gear box and clutch when my car decided to stop working while I was driving home. Luckily some lovely guys helped to push me to the side of the road. Very embarrassing. Let’s just say it wasn’t cheap, but thankfully, my emergency fund saved the day.
Your emergency fund should ideally cover three to six months’ worth of living expenses. That way, you’re prepared for any unexpected expenses, like home maintenance bills or car repairs. You can start building your emergency fund by setting aside a little money each month. It may take some time to reach your goal, but it’s worth it for the peace of mind.
3) Debt: The Four-Letter Word We All Dread
Debt is a four-letter word that we all dread. But don’t worry, you’re not alone. According to recent studies, the average UK household has over £15,000 in debt, excluding mortgages. Yikes! But don’t let that scare you. There are ways to tackle debt and get on the path to financial freedom. I share how I achieved debt freedom in my book “How I Paid Off £36,000 Debt: My 10 Steps To Debt Freedom”.
One trick is to prioritise your debts by paying off the ones with the highest interest rates first. That way, you’re reducing the amount of interest you pay over time. You can also consider debt consolidation, where you combine multiple debts into one loan with a lower interest rate. Read more about this in this blog How To Get Out of Debt with Bad Credit.
4) Retirement: Start Planning Now
Yes, retirement may seem light-years away, but it’s never too early to start planning. According to recent studies, over 4 million Brits are not saving enough for retirement. That’s a scary statistic. But it doesn’t have to be you.
Whether it’s through a workplace pension plan, or individual retirement account, there are ways to start saving for the golden years. You can also consider increasing your retirement contributions by a percentage point each year. That way, you’re gradually building up your retirement savings without feeling the pinch too much.
5) Education: Start Saving Early
If you have children, it’s never too early to start planning for their future education expenses. In the UK, there are several options to consider, such as Junior ISAs (Individual Savings Accounts), which are tax-free savings accounts designed for children. They can be used to save for education expenses, among other things.
Another option is to start a regular savings account specifically for education expenses. You can set up automatic transfers each month to make sure you’re consistently saving for your child’s future education.
It’s also worth researching scholarships and grants that your child may be eligible for in the future. By planning ahead, you can help ensure that your child has the financial resources they need to pursue their education dreams.
6) Insurance: Protect Yourself and Your Family
Insurance may not be the most exciting topic, but it’s crucial for protecting yourself and your family. There are several types of insurance to consider, like life insurance, health insurance, home insurance, and income protection insurance.
Life insurance can provide financial security for your loved ones in case of your unexpected death. Health insurance can help cover medical expenses and give you peace of mind. Home insurance can protect your home and belongings from unexpected events like theft or damage. Income protection insurance is designed to provide a regular income if you’re unable to work due to illness or injury.
Having the right insurance policies in place can give you and your family the financial security and peace of mind you need to navigate life’s unexpected challenges. Make sure to research different insurance options and choose policies that meet your specific needs and budget.
7) Savings: Pay Yourself First
When it comes to saving, the trick is to pay yourself first. That means setting aside a portion of your income for savings before paying your bills or expenses. This can help you prioritise your savings and make sure you’re putting money away each month.
One way to do this is to set up automatic transfers from your current account to your savings account each month. That way, you don’t have to think about it, and it happens automatically.
8) Credit Score: Your Financial Reputation
Your credit score is like your financial reputation. It’s a number that tells lenders how responsible you are with credit. A good credit score can help you get approved for loans and credit cards with favourable terms, while a bad credit score can make it harder to get approved or result in higher interest rates.
You can check your credit score for free using websites like Experian or ClearScore. It’s also important to monitor your credit report regularly to make sure there are no errors or fraudulent activity.
9) Investments: Make Your Money Work for You
Investing may seem scary, but it’s a great way to make your money work for you. There are several types of investments to consider, like stocks, bonds, and properties. You can start by doing some research and learning about different investment options.
One way to invest is through a robo-advisor, which is an automated investment service that uses algorithms to manage your portfolio. Robo-advisors can be a great option for beginner investors because they offer low fees and a hands-off approach.
10) Financial Goals: Set Them and Achieve Them
Last but not least, setting financial goals is crucial for achieving financial success. You can start by setting short-term goals, like saving up for a vacation, and long-term goals, like paying off your mortgage. It’s important to make your goals specific, measurable, achievable, realistic and timely.
You can also consider working with a financial planner to help you set and achieve your financial goals. A financial planner can provide personalised advice and help you create a plan for achieving your dreams.
Managing your finances can be a daunting task, but with these 10 personal finance goals, you’ll be well on your way to financial success. Remember to budget, build an emergency fund, tackle debt, plan for retirement and education, protect yourself with insurance, save, monitor your credit score, invest, and set financial goals. With a little effort and determination, you can achieve your financial dreams and live a life of financial freedom.
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