We all have hopes and dreams for the future – but how do we make that retirement on a beach in Hawaii a reality?
Even if Hawaii is beyond the realms of reality, whatever your hopes and dreams for the future, setting financial goals can help you to achieve them.
Photo Credit: Ariane Middel
Here are three financial goals that are worth your time:
Pay off debt
Interest could be adding tens, hundreds, maybe thousands of pounds to your debts. If you can afford to overpay your credit card, loan, or overdraft every month, you could save yourself a great deal of money – because the interest on those debts would have less time to grow.
If you can’t afford to overpay your debts, but you’re still getting by, you could transfer your debts to an interest-free credit card. Just make sure you keep repaying those debts, because zero interest deals don’t last forever and you could be charged a high rate of interest eventually. It probably isn’t worthwhile if you don’t think you can pay everything back before the interest-free period ends.
If you cannot afford your debts anymore, speak to an expert in debt solutions, like www.debtadvisorycentre.co.uk, about repaying debt as quickly as possible.
Save for the future
If you have more money than you need to cover your essential living costs each month, then you should be setting some (or all) of it aside for the future.
Short-term savings goals may be for one-off expenses like holidays, birthdays and Christmas. Your longer term savings goals are for larger expenses, like a deposit on a house, a round-the-world trip, or starting your own business.
People don’t like thinking about getting older, but everyone should plan for old age. People are living longer, after all. Options for financial security in retirement include paying into a private pension, into a savings account, into an endowment policy, or investing in property.
Have a contingency plan
There are some things you can plan for, and some you can’t, but you can make provisions for yourself and your loved ones in case something goes wrong.
Financial planning is partly about managing risk. For example, if you’re financially responsible for children, a partner or a relative, you might consider insurance in case you ever find yourself unable to provide for them. Or, if you’re considering a new investment, consider whether you can afford the investment possibly losing value, or costing you more than you anticipated. Savings, or insurance, can be valuable safety-nets for life.