While the coronavirus pandemic might have given rise to clouds of uncertainty, it is in our best interest if we make some conscious effort and don’t let it cloud our judgment.
The global pandemic has dragged everyone towards an economic downturn, and any goals you might have set seem insurmountable now.
Amidst mounting uncertainty, it is perfectly normal to wonder how one can achieve their financial goals. But, what if we tell you to hold onto that rope of faith because there are ways you can still keep things going!
In the following article, we are going to explore this area and discuss how it is possible to turn things in your favor when it comes to achieving financial freedom.
Let’s dive in.
A Progressive Mindset
To put things in perspective, your desired financial future is very much within your reach, just like the way it would have been before the pandemic struck. The only difference is the mindset here!
While it is perfectly natural to worry during such uncertain times, you should not dwell on things you cannot control. The first and foremost step towards achieving your saving goals is to embrace the situation, make peace with it, and work on the things you can control.
Now, you must be thinking, how can you do that?
Well, what you need to do is cast aside the concerns related to a pandemic for a moment and go a little back in time. Try and think about factors that have always been a source of threat or could have sabotaged your financial freedom.
Recognizing the Lack
There is no denying that the Coronavirus pandemic has come with legitimate challenges; the truth, however, is that there have always been hurdles in the way. To top it all, we always have an excuse.
It is important to steer away from those excuses and respond to them to stay committed to the goal.
One such excuse is that there is still time until retirement and that it is okay to spend that money elsewhere. The mindset that you have more time to gather enough money to put away later in the next year can be detrimental.
No matter how justified an excuse might seem, one has to pull away from distractions to achieve their saving goals.
5 Ways to Achieve Saving Goals
While there are always going to be things you won’t be able to possibly control, you can still level up to specific measures to hit your goal. Let’s discuss some ways you can strive to achieve your desired goals!
1. Start your financial diet
If you are struggling when it comes to handling your finances, it is high time that you start working on a budget plan. It is very important to keep track and align your spending with your income.
To begin with, start by penning down your income and all the expenses, followed by subtracting the expenses from the income. This will give you a figure that will be your discretionary spending.
Next, you should craft a budget to allocate this spending at the start of each month. One way to do this to evaluate the way you shop every day. According to saving app Kupino, “while price watching and budgeting may be a long term strategy, the average shopper can save up to 30% of shopping expenses just by watching the price of products that are in high demand”.
If you tend to spend more than you earn, you need to make some realizations and fix things.
2. Prioritize your goals
As with any other dream, the key to success lies in having rock-solid goals. Write down your goals with a timeframe within which you would like to ace them.
Once you will do this, you will have a clear picture and a good grip on your budget. We will suggest that you opt for a reverse budget strategy to maximize the outcome. This means determining the figure you need to save to achieve your goals and set them aside. You can then spend whatever amount is left to your liking – housing, grocery, outing, etc.
If devising a strategy is not your cup of tea, we would recommend you reach out to a financial advisor. This is because strategizing here is important and so, do whatever it takes to formulate one! When you have a strategy put in place and in action, it is easier to be on track and achieve your goals. This stands true even during uncertain times, such as this pandemic.
3. An emergency fund
If you have ever underestimated the importance of an emergency fund, this crisis should serve as a reality check. It is never a wise idea to live paycheck to paycheck. You might eventually end up losing your balance when you encounter a financial obligation you never saw coming.
We could not agree more that you cannot control what the future has in store, but one can surely plan ahead! This is what we call a pragmatic approach, i.e., to be ready to deal with whatever comes our way.
One must always aim to build up an emergency fund with enough savings to last up to at least 3 to 6 months. This will enable you to enjoy some sort of stability in times of unfavorable circumstances.
Speaking of this, emergency funds must be liquid and, of course, placed somewhere safe. Therefore, it is best to keep them in an account, such as the online money market. This will be a better option as it might earn a tad more than if kept in a traditional bank.
4. It is high time to allocate for the future
We understand how difficult and challenging it can be to juggle between several financial priorities. And, rightly so! After all, each and every goal requires a different amount and timeframe. In a time when the pandemic has hit hard on finances, one would, justifiably, want to ensure managing finances in a way that you get to meet both your short and long-term targets.
One way to do this is to open multiple savings accounts. This way, you feel accountable and thoroughly dedicated. You label each account and put in money into each designated account, and this way, you will be sure that you are timely meeting your obligations.
Through multiple accounts, you can enjoy the benefit of jointly managing expenses with your partner and make the most out of your accounts.
Other than this, you will have the liberty to alter things as per your needs until things start getting back to normal. Moreover, multiple accounts make it easy to keep track of that one-time expenditure that crops up each year. For instance, if you have to pay home insurance on an annual basis, you would know that you need to put aside the said amount in the account meant for “insurance.”
This is how multiple accounts can streamline your savings, unlike one single savings account.
5. You need to start early
To sum up, remember that tomorrow never comes! What you have is now, this very moment or never.
If you start forming the habit of saving and investing right from a young age, you will only do yourself a favor. This is because, when you prepare to save from a young age, you have more of a margin in terms of time to expand your bracket of savings as your income soars.
Final Words
It is true that everything seems bleak right now and far-fetched. But, a conscious effort and determination to follow the above mentioned suggestions might save your boat from sinking.
It is crucial to shift the focus in order to achieve financial goals, and the approach could only come if you practice a positive mindset.
About the Author:
Ivana Zoldak is a lifestyle blogger, content expert, and travel enthusiast based in Europe. Currently she runs Kupino Magazine and shares frugal tips and lifestyle hacks with readers across the USA. She’s been featured in The Huffington Post, Redfin, and U-Today.