Making A Financial Plan: How to Set Financial Goals To Live Your Best Life

By Brian Wallace on January 13, 2020 - Fact checked by Dumb Little Man

by Brian Wallace January 13, 2020

Financial planning is a crucial part of adult life, yet 40% of Americans have never had a budget.

Sticking to a budget can help prevent you from falling on hard times. It can also help you achieve your goals in life.

However, contrary to what most people are thinking, financial planning and budgeting aren’t just for retirement. It’s not just the practice of foregoing the occasional latte.

Making a financial plan can give you peace of mind and, eventually, the life you’ve always wanted.

Why Is Money So Stressful?

People who have a financial plan are two times as likely to meet their financial goals as those who do not have such a plan, yet two in five people have never had a budget. More than one in three people spend more than they save, and two in three say they easily overspend when using a credit card.

But it’s not all bad news. 48% of Americans say they save at least 5% of their income, 65% say they have emergency savings, and 79% are either debt-free or they are actively paying down their debt.

Of consumers who report having a budget:

62% say they are in control
55% say they feel confident about their finances
52% say they feel secure about their financial situations

Of consumers who do not have a budget:

19% feel out of control with money
18% are constantly worried about their finances
17% report being stressed about money

When it comes to retirement, even though many people are saving, they still don’t know why or how much. In fact, 75% of Americans aren’t sure how much they should be saving, while 40% of those with retirement savings have no idea how their money is allocated. It’s no wonder the thought of budgeting and saving money is so stressful for so many people – even when we know that we are supposed to be doing it, we still often have no idea how.

Setting Financial Goals And Sticking To Them

If you are at a point in life where you are able to save money, congratulations!

Now, it’s time to ask yourself why you are saving money in the first place. Sure, everyone should be saving money for emergencies. But once you get past your emergency savings, there are all kinds of other savings you should be doing, from retirement to enhancing your quality of life.

So how do you want to live and what financial goals can you set to get to that point?

Sometimes, setting financial goals starts with reinventing yourself.

What kind of career would get you out of bed every day? How would you spend spare time if you had it? Is there something you would like to learn or a new educational goal you’d like to meet?

Last year 39% of Americans said they wanted to save more money and for many, that means making a career change.

Setting goals for yourself helps you to understand what steps you need to take to meet them. 97% of parents say they want to pay all or part of their child’s college tuition, yet few understand just how much money that is or how much they should be saving right now in order to accomplish that goal. Currently, only 27% are on track to meet those goals.

Setting goals and then figuring out what action you need to take now in order to achieve them is critical.

Once Basic Goals Are Met, Make Your Life Worth Living

The main reason for financial planning is that someday you will want to be able to live life on your own terms. The better your financial planning, the sooner you will be able to live the life you want because of it.

Once you have enough to cover all of your financial goals, it’s time to figure out how to buy back some of your time. There are apps and tech gadgets that can take over your daily tasks like cutting the lawn, cleaning the pool, and hiring a handyman. Using these services can help you feel like your hard work has been rewarded when you are able to do the things you want instead of having to do the things that need to be done.

Financial planning is an important first step toward the life you want. Learn more about freeing up time, reducing stress, and living your best life through financial planning below!

Financial Planning For Your Best Life

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Author: Brian Wallace

Brian Wallace is the Founder and President of NowSourcing, an industry leading infographic design agency based in Louisville, KY and Cincinnati, OH which works with companies that range from startups to Fortune 500s. Brian also runs #LinkedInLocal events nationwide, and hosts the Next Action Podcast. Brian has been named a Google Small Business Advisor for 2016-present and joined the SXSW Advisory Board in 2019.