Little changes can make a big difference.
Personal finance goals are not exciting. However, what they can help you to achieve could change the course of your life. Managing finances is such a key skill for success but so few people really learn how to do it until much later in life. However, the reality is that the sooner you start setting – and meeting – your personal finance goals, the more likely you are to get ahead.
Why set personal finance goals?
Goal setting is a tried and tested technique for achievement so why wouldn’t you apply this to your personal finances? Setting achievable goals – and mapping out realistic steps to take to reach them – will enable you to move through your life in the way that you want to. You’ll also be far more aware of your finances if you’re working towards goals – and, consequently, more likely to be able to spot any problems before they arise, and handle them quickly. If you want to nurture great financial prospects then there are good reasons to make personal finance goals at any age in life. They will help you avoid having to borrow on bad credit loans or no credit check loans to buy what you want.
In your 20s
Whether you’re a student, a graduate or working, now is a great time to start laying the foundations for the future. Set financial goals in your 20s to:
- Map out how – and when – you will start to clear debts
- Start to build a positive credit history
- Begin creating an emergency fund
- Start repaying student loans
- Foster an awareness of how you’re going to create financial stability for yourself
In your 30s
We’re all different but this is often the stage of life when there are big changes. Working with personal finance goals now has a number of great advantages:
- Enabling you to fund big life events, whether that’s getting married, having children or starting your own business
- Providing the opportunity to focus on debt repayment
- Making an early start on planning how you want to pay for your retirement e.g. pensions, savings, property
- Building on that emergency fund
In your 40s
For many of us now is the time that we begin to realise our working lives won’t last forever. Setting goals at this stage helps to:
- Focus your mind on how to make the most of the savings that you have for the future e.g. investing or overpaying your mortgage
- Understand whether life insurance products are the right option for you
- Review debts and create a realistic strategy for being debt free before you retire
In your 50s
The State Pension Age is currently 65 for men and increasing to 65 for women. By 2028 it will be 67 for both. Setting goals at this stage can make a big difference to the kind of retirement you’re able to enjoy. For example:
- Aiming to overpay into pensions to boost annual retirement income
- Investigating other options for tax free savings while you still have a regular income e.g. ISAs
- Building on, or refining, any investments you’ve made
- Working out how to pay off your mortgage if you have one
In your 60s
Retirement is on the horizon for many of us now but that’s no reason to stop setting financial goals. In your 60s, personal finance goals are essential to:
- Ensure you understand how to best spend the retirement income that you will have without running out of resources
- Work out how to sell off any assets you don’t need – to create more income
- Fully plan what will happen to your estate when you die
- Identify any shortfalls in what you hoped you’d have to spend for retirement and can still find ways to make these up.
Setting personal finance goals is something we can all do at every stage in life – it’s never too late to start taking control.