How to Achieve Important Long-Term Financial Goal

Introduction

Setting up long term financial goals as a small business owner an be daunting. If you’re scrambling to get your business up and running or struggling to meet payroll, the idea of long term planning may seem a silly way to burn your time. However, daily activities and regular habits can lead to positive results. The earlier you start, the more you can build.

Projects Vs. Tasks

A project can also be thought of as an end goal. For example, if you want to retire by 60, that’s your project. Now you need to create a list of tasks or next action steps to help you reach the big goal. For example, if one of your Long Term Goals is to renovate your house so you can age in place, you can set up a project of “modify the front entrance to get rid of the steps”. The tasks included in this might be

  • remove existing railing
  • replace concrete between a driveway and front walk
  • widen access to the front porch

Ultimately, this list may include “build a ramp to front door”. No matter what your long term needs are, you can start financial planning to make your house usable and easy to live in as you age.

Financial Planning

When you’re building your business, it can be easy to see nearly every penny go toward the construction of that dream. However, it’s critical that you start your own financial planning process early to make sure you have access to an Emergency Fund and that you’re paying yourself enough to reach your Long Term Goals You may not be ready to meet with a professional for your Financial Planning session. However, if you’re thinking of starting a family, buying a house or making another big purchase, it’s a good idea to connect with a skilled professional who can help you assess your risk tolerance, plan for your children, help out your parents if needed, and many other concerns specific to your situation.

Emergency Fund

As a small business owner, you may be managing a lot of financial data. If setting up an emergency fund isn’t really on your calendar yet, set up an automatic withdrawal into an online bank for emergency savings. There are several reasons for this:

  • online banks generally have a higher interest rate
  • an automatic deduction means you don’t have to think about it
  • once your account is created, you can set up multiple savings “buckets”
  • you can name your buckets for fun things like travel
  • you can lose your password

Set up your online bank account with a trusted loved one and have them create your password. Make sure that you are the one in charge of the email contact information and all of the security questions. However, you don’t want the password to this account. You want to make pulling money out of this account nearly impossible. If you get in a bind and must pull money out of it, you can reset the password because you set up the security questions. However, until you must have it, it can grow, sight unseen. You don’t have to worry about it, you can’t check the balance, and you have some coverage in place if things get really scary.

Get Visible

Your brain likes to take pictures. Many people who prefer reading to television do so because the image in their head is so much better than what’s on the screen. Put this power to use with a vision board. A vision board is a personal space to create a reminder for your goals. If you want to buy an RV to enjoy in retirement, do a little research and figure out which one looks good to you right now. Print off a picture of it and put it on the wall by your desk. You have a vision board. Whatever your long-term goals are, you can keep them in front of you with a visual image of the item you want or the place you want to visit.

Set Deadlines

If you want to set up your emergency fund by the end of the current month, make yourself a calendar popup to find the best savings rate. If it pops up and you can’t address it right now, snooze it for four hours. Basically, you need to irritate yourself into action. It’s easy to always focus on the closest fire that needs to be tended or doused. Pester yourself to act.

Habits

Your habits are the best tool that you can use to get you to your Long Term Goals. Even if you don’t hit them, with good habits you’ll at least wander close to your goal. When you’re working on habits, do some serious thinking about your physical energy level. Be honest with yourself. Habit-building isn’t especially hard. In fact, your brain does it automatically. By being aware of the best time of day for you to tackle the tough stuff, you can guide your brain to build a habit of focusing on the tough stuff when it’s energized. If you’re a slug in the morning and wide awake by 8 pm, don’t push for big, creative thinking about long term projects in the morning. You’ll just come to hate the process and instead focus on the little stuff. If you’re an early morning energy lark, don’t put off exercising until after work. You’ll never get to the gym. Also, don’t ask your brain to do complex things after sundown; your morning brain will be irritated at having to do them again tomorrow.

Take Care of Yourself

The best financial decision you can make about your later years is to take good care of yourself. One of the challenges of being a small business owner is that it’s far too flexible. You can work 24 hours a day if you want! However, working yourself into the ground in your early years does not set the stage for a happy retirement Eat right. Stay strong. Be nice to your brain and your body by feeding it well, staying hydrated, exercising regularly, and knowing when to take time off. Additionally, if you’ve got a loved one who’s willing to stick by your side through the insanity of being a small business owner, do what it takes to keep that connection healthy and strong. Staying married to the right person is a really smart financial habit!

FAQ

How to plan for medium term financial goals?

There are hundreds of different approaches to creating a financial plan. However, the most indispensable thing is to find the right one and work with it.

  • Evaluate your needs – We must decide what we want and what we need, and make a list of both things. Evaluate the current financial situation. Study carefully how things are currently going. We can call this “making an inventory”
  • Set goal – The process to set financial goals includes converting our needs into a smart goal. A goal is a very specific outcome that is intended to achieve something. We can have both short term goal and long term goals. To have goals for the day, for the week, for the year, and for a whole life. There is a saying that a goal is a dream with a date.
  • Define a plan – It is important to develop a “life plan”. Ask the question: Where do we want to be in 5, 10, and 20 years? Once this task is clear, imagine the required actions to take to achieve those goals. The next step is to visualize the order of importance for those steps. What will we do first, second…last? 
  • Act – The first step to fulfilling our goals is to act. Many times, these are not achieved because the first step was never executed. Having a plan, by itself, does not mean it will achieve the goals. It is essential to have things listed in a financial plan.

Why and when do you need a financial advisor?

When we need guidance on how to manage our finances to reach our saving goals we must also find an expert: financial advisor. Anyone who wishes to make a financial goal a reality should get advice from a professional who is well prepared in this area. This person will be a mentor and a guide when someone needs proper recommendations.

In order to carry out his work, this professional analyses the past, present, and future situations of his client taking into account variables of the company’s wealth, financial security, depending on a realistic goal. This one will help to look into the financial priorities and decide on possible lines of investment, where to invest much money, or how to improve the savings account. Then, he could consider improving its expenses. Furthermore, a good certified financial planner can assist users to manage financial picture, including by setting up a retirement saving and monthly goal strategy. Surely, If clients feel stressed about their money or feel like they do not make the best choices, suddenly a financial advisor would be a financially smart decision that would most likely result as an important investment since it will help to set a smart financial goal for a company. In brief, this person is needed at all times to achieve financial success.

How can you prepare for financial emergencies in future?

The key to taking a business to the next level is to keep it solvent and responsible. A strategy has to be developed that involves the employees and avoids any panic. For example, in the financial world, it is essential in terms of preventing inconveniences or necessary payments having a savings goal. Having enough money saved is vital to solving future problems, but it is always vital to have specific savings such as retirement planning, personal finance goals, and business objectives. In addition, money can solve most of the problems of a business, but it is preferable not to get ahead of ourselves and make decisions that can hurt us in the long run. If our company has been operating for several years, and we have employees and customer accounts, we should consider applying for a corporate credit line; this may help us in the beginning, as our needs may well be resolved with a temporary loan. The priority is to keep your business operating in the best way possible, always thinking about the location, employees, customers, and products.

Should we pay off debt or save for retirement?

We must do both: paying off the debt first saves us more money because we are simply likely to spending more than earning. In other words, any debt we are paying interest on means we are losing money. But that fact does not necessarily mean that we should pay off all our debt before starting saving for a retirement fund.

 If we do not have money set aside in an emergency fund, we are forced to accumulate more debt through unexpected living expenses. If these unexpected expenses are not provided for, through an emergency savings fund, they are usually paid for by high-interest means such as credit cards or unsecured personal loans. These payment methods are traditionally much higher interest than a mortgage or student loan, which means they cost more if they are not paid off quickly. First, we must create a budget. Once we know how much money we have monthly to put into debt and savings, we divide it up. The percentage of the division made is highly individualized and depends on our unique money goal situation. Secondly, prioritizing the debt needed to pay off. High interest, unsecured consumer debt such as credit card debt or personal loans must be paid off first. We save money by paying off high-interest debt since the interest paid is often more than we would save and invest. The sooner we start saving, the better because, with compound interest, even small contributions will increase significantly.

What motivates you to stick to your financial plan

A financial plan requires many steps such as setting the funds, predicting the capital, controlling and verifying the resources, and many more steps. But when we do all this, there is one thing that must not be lost, motivation. A very important key to success is motivation, it is what drives us to do everything with more confidence, and with more probability that the tasks or goals will be successful for financial independence. If we analyze the most frequent reasons that lead a person to become unmotivated, we will find:

  • Lack of confidence: we must trust ourselves, focus on the positive in achievements and the lessons of failure. Thinking about the successes of the past will show us that we have been able to achieve objectives and that nothing prevents us from achieving them again in the future.
  • The lack of objective: to clarify the objectives, we must look for what our real future goals are, and make sense of what we do and what we want. A clear objective lets us know where we are and encourage us to achieve our goals.  
  • The lack of strategy: when we have clear objectives we must develop the strategy. Without it, we cannot choose the best way to reach our goal. And if it is not working, it is a sign that something needs to be repaired and to keep going, because here we are getting closer to success.
Secured By miniOrange