Thursday 24 August 2017

Freedom Financial Network Tips: Setting Short, Medium, and Long Term Financial Goals for Your Future

One of the most important steps that you can take towards a more financially secure life is to set a variety of savings-related goals- after all, if you aren't working towards anything, you will likely end up trapped back in the cycle of living paycheck to paycheck. Freedom Financial Network has helped tens of thousands break the cycle, and we're proud to provide tips on saving for the most important goals in your life. If you've never set a financial goal for yourself before, here are some of the most important  short, medium, and long term milestones that the experts at Freedom Financial 
Network recommend prioritizing.

Short Term Goals
·      Create a budget. Establishing a budget for your spending will take little more than a few hours, yet will have massive benefits when you begin your journey out of debt or to a more healthy financial future. Pull your bills and paystubs from last month, and take stock of how much money you have coming in vs. going out every month. Experts at Freedom Financial Network recommend combing through your regular expenses and locating areas in which you could cut back on your spending. For example, if you notice that you are going out for coffee every morning before work, at a rate of $3 five days a week, bringing your own coffee just three days a week can save you over $700 over the course of a year.
·      Pay off your credit card debt. The number one thing that you can do to improve your financial health is to pay off your outstanding credit card debt (making on-time payments of at least the minimum amount contributes to about 35% of your credit score makeup). Credit card debt accumulates interest, which can trap you in a cycle of paying off less than the required minimums, and allowing interests to pile up. Experts at Freedom Financial Network recommend one strategy could be listing all your outstanding credit card payments by interest rate, and paying only the minimum balance on all but the highest-interest card. This could allow you to slowly work your way out of debt, while avoiding the dreaded additional interest payments.
·      Create an emergency fund. Emergencies can happen to even the most financially stable person. Make sure that your next one doesn't destroy your credit by setting aside money for a financial safety net. The recommended starting amount is $500-$1,000, but after this goal is reached, you will want to continue to make small contributions to cover you in the event of a longer-term emergency like unemployment or medical expenses.

Medium Term Goals
·      Pay off your student loans. One of the biggest drains on most adults budgets are student loan payments. If you are having trouble making your payments, refinancing can help you to make the debt more manageable- however, if you have federal loans and you refinance with a private lender, you can lose benefits like income-based repayments. If you would not benefit from refinancing, treating your loans like common credit card debt is the best strategy for repayment- pay off the highest-interest items first, and make more than the minimum payment if possible.
·      Get your insurance in order. After you have paid off all outstanding debt, you will want to take steps to invest in your future. This can mean looking into life and disability insurance, which will help to provide for you and your family in the event of an accident.
·      Consider other future dreams and goals. Fantasizing about your future is the first step to figuring out what you consider worth saving for in the near future. Perhaps you'd like to purchase a home, go back to school and continue your education, or save for your children's college; think about what you consider important, and start creating a plan to reach these financial goals in the future.

Long Term Goals
·      Save for retirement. The biggest long-term goal that most people need to consider is saving for their retirement. As a general rule, the experts at Freedom Financial Network advise everyone to put aside 10-15% of every paycheck into a tax-advantaged retirement account like a 401(k), 401(b), or Roth IRA. In addition to saving, you will need to sit down and figure out how much time you have until reaching retirement, and calculate a comfortable yearly spending limit. First, determine your estimated retirement dates, and calculate the estimated amount that you and your spouse will receive, along with your retirement assets. You will likely want to consult a professional financial or retirement planning service to help you create a saving plan that will help you craft a plan that lets you comfortably save for your needs.

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