Tag Archives: financial goals

The Correct Way To Go For Your Money Goals

Back in November we wrote a post giving our advice about some financial goals to shoot for in 2016. Those are good goals at any time, and in that article we shared other goals we’ve recommended over the years.

The best thing about goals is they help us to keep on track for what we hope to accomplish. The worst thing about them is that, if we don’t reach them, sometimes we get depressed or frustrated, which leads us to giving them up.

Recently there was an article that talked about financial goals in a way that makes a lot of sense. In essence, the person who wrote the article said that most people look at the big picture when it comes to goals. For instance, if they want to make $10,000 more a year than the previous year, they start at the end, which is the $10,000, instead of at the beginning, which is figuring out how to generate more income in the first place. That’s the difference between having an actual goal and having a dream to shoot for; it’s an important distinction.

Let’s take that $10,000 as an example. If you work at a corporation making $40,000 a year and your goal is $50,000, yet the company usually only gives 3% raises every year, you don’t have a chance to hit your goal if that’s all you have to count on. This means you have to either get another job, a part time job or find another way of making money on the side.

Let’s say you did either of these things.

A part time job might do it for you, and it’s probably your best immediate option. If you found a job paying $10 an hour and committed to 100 hours a month you’d earn $12,000 in a year, which would put you at your financial goal. Or maybe you could try to find a way to create your own income. Either option is viable, as long as you recognize one important thing – it’s going to take some time.

That’s not a bad thing, but it’s something that’s hard for a lot of people to consider. That’s why goals need plans, because the plan will help you realize how long it may take you to achieve your financial goal, whether it’s making money, reducing debt, or saving money. If you invest $10 a month into stock options, it’s going to take a very long time to get that money to grow; if you could afford to pay $1,000 a month it’ll grow faster, but even there if you have big dreams for great wealth it’s going to take time to realize it.

The article recommended people get used to the idea of financial growth by thinking in small increments. If you’re looking to reduce debt, concentrate on one bill at a time as the one to pay off while still making payments on the rest. If you’re trying to increase your income, start by trying to find a way to make $100 of extra money, then see if you can expound on it.

We want to see everyone living in comfort and financial responsibility. We’re not dream providers but, as accountants, we can help you learn where you are and figure out where you might want to be financially. After that, the skies the limit if you have the patience to ride out the time.

Will You Have Financial Goals In 2015?

Back in 2013 we had an article on the blog titled Setting Financial Goals. In that article we laid out what we considered the 3 most important things for any financial goals one might wish to set: saving money; reducing debt; and increasing income.

Money Shirt
Creative Commons License Rob Lee via Compfight

Every once in a while we get the opportunity to work with clients to help them set financial goals for the year. The year doesn’t always start at the beginning, but it’s a good time to do it because it fits with the tax time period.

Almost everyone that comes in wants to talk about one thing, which doesn’t quite fit any of the three, though comes closest to saving money; reducing how much they might owe in taxes. It must be an occupational hazard for being a consultant because, though it’s a big part of what we do, it’s not the only thing we do.

Truth be told, taxes aren’t a major concern when other needs are met. Although you sometimes hear a few rich people complaining about having to pay too many taxes, the overwhelming majority don’t have a problem with it because they have enough money and, if they’ve got good accountants, all that is taken care of and they still have lots to play with.

If you’re worried about having to pay taxes, learning how to save money and cut corners on spending will provide you with enough to pay your taxes. Also, if you’re really good you can make sure you’re having enough taxes taken out of your paycheck if you’re still employed.

If you reduce your debt you invariably end up with more money. That’s because as you pay your bills down you owe less, and even if you keep paying them at the same high rate you’ll pay off the debt sooner, which means you’ll have a nice chunk of cash you can move elsewhere.

If you increase your income… well, we already touched upon that part. 🙂

With that said, do you have any ideas on what types of financial goals you really should have? If not, we’ll give you 3 to think about:

1. Find ways to generate more income in 2015. There are so many ways for people to do this that all it takes is an hour of uninterrupted thought every day for a week to plan it out and you could be making more money in another week. The idea is to think about what you can do, how much more money you’d like to make, and then go for it. Many people are doing it; you can also.

2. Set a goal to pay off one of your bills where the payment starts at least at $100 a month. If you don’t have anything like that good for you. If you do, realize that if you could pay one of those bills off you have the opportunity to have an extra $1,200 a year and it’s tax free! Pay off more debt and you’ll have more money the same way.

3. Think of one thing you’re willing to give up or alter that will help you save even a little bit of money. For Christmas one of my friends got a coffee maker and many bags of special coffee that can be made at home. The reason was her daughter hated knowing that her mother was stopping at a national coffee location buying expensive coffee every day, both going to and coming home from work.

Suddenly, her mother can now save $10 a day, which equates to around $300 a month, which can be applied to other things. And the coffee will be just as good, maybe even better because that same brand can be bought in many stores if she wishes to stick to that brand and will still cost her less than paying someone else to make it.

Financial goals don’t have to be really big to make a big impact. All it takes is a little bit of ingenuity adn the willingness to make a change here and there. After all, isn’t a new year a good time for resolutions and goals?

We wish everyone a safe and happy new year, and of course a financially successful year as well.

Setting Financial Goals

As we get closer to the new year, it’s a good time for you to start thinking about financial goals. Those goals will be different if you’re a business, an independent professional or an individual or family, but it’s still important to work on setting at least a few goals.

There’s always a debate about whether it’s better to set goals that are definitely reachable or whether thinking outside of the box and shooting for the moon is the way to go. Truthfully, the best goals are the ones where you actually have some kind of control over it because it’s easier to stay focused. For instance, if you said you were going to save $25,000 but you only make $30,000 a year right now and have $5 in your savings account, it’s probably a very unrealistic goal without some other plans that have nothing to do with finances.

All financial goals are about 3 things: saving money; reducing debt; and increasing income. You can set your goals based on one thing, or you can try to do something with all three. If you’re already doing well financially maybe you don’t have to worry so much about the last one, and yet even there the concept of income isn’t a strange one, as income is more about growing your money than about finding a new job.

Whereas when we talk about budgeting we always start with figuring out income, when setting financial goals you always think about your debt first. This is because most people have higher debt, as it pertains to percentages at least, and it’s probably the most important thing to know where you stand.

Next on the list comes saving money. This is important because it’s your first step towards becoming fiscally responsible. Saving money takes on two forms. One is actually saving money, such as in a bank, investments, etc. The other is saving money on purchases, whether it’s new items such as clothing or items such as food, which are recurring purchases. There are families that learn how to save $100 or more each month just using coupons or store coupons at stores they don’t usually frequent. Just imagine how important an extra $100 is a month without having to worry about an increase in taxes.

Finally comes the topic of increasing income. It’s last on the list for two reasons. One, not everyone has to deal with this one as a definite thing, although looking at different ways to invest money in higher yield returns might not be a bad idea. For some people however this will be important if they’re just barely getting by on what they make now. We’ve previously warned people about the tax dangers of part time jobs but that might be one way to go. Another way to go is to see if you can get a raise where you work. If it’s a large company where you can’t just ask for a raise, it might be time to broaden your scope of employment opportunities for something that pays better.

No matter what you do, setting goals is only the first step. No goal can be achieved without plans for how you hope to get there. Of course if you ever need help in that arena, give us a call. 🙂