Money Is Relative
Does anyone ever have enough money? Well that all depends. The amount of money you need all depends upon your financial goals. Financial planners will tell you to determine your financial goals before determining if you have enough money.
What Are Your Financial Goals?
Everyone has different financial goals. If you are serious about saving enough money you need to ask yourself what those financial goals are. How can you save money for something if you don’t know how much you will need?
If you do not have any financial goals, that’s okay; but it’s hard to believe that you don’t because everyone has some type of financial goal. Maybe you want to retire at an early age, be debt free, pay off your credit card debt, improve your credit score. Those are all examples of financial goals.
To Have Enough Money Develop A Financial Plan
Where are your finances now?
Do you have a financial gap?
A financial gap is the difference between the amount of money you have compared to the amount you will need to reach your financial goals. Unless you are a billionaire, you probably do have financial gaps. Financial gaps are not bad, you just need to recognize what they are and make the effort to learn how to fill in those gaps.
Where do you want your finances to be?
Before you can reach your financial goal, you need a target.
If you want to retire early for example, do you know how much money it will take to do that? There are financial calculators available to help you; use these calculators as a tool to set a bench mark for your financial goal. If you want to be debt free, have you added up all of your debt to determine the amount of money you will need to pay off that debt?
How do you get there?
Financial Goal To Retire Early
- Determine the number of years you will spend in retirement.
- Determine the percentage of your current income that you will need in retirement.
- Determine the amount of money that may come from Social Security.
- Determine the gap between the amount of money you will need compared to your current investments.
- Increase the amount of money you are currently investing.
- Instead of retiring early you may have work longer but perhaps you will only need the income from a part-time job vs a full-time job.
Financial Goal To Be Debt Free
- Change your financial habits.
- Live within your means; do not spend more than you earn.
- Stop creating debt.
- Only buy based on needs not wants.
- Practice patience; only buy an item if it is on sale. Most items eventually go on sale.
- Credit card debt can be managed with the right direction.
- First, never miss a credit card payment, always pay the minimum amount due every month.
- Then attack the credit card debt that has the highest interest charges.
- Then, the credit card that has the highest debt.
- Finally, the credit card that you can pay off the fastest.
- Don’t get discouraged; practice makes perfect.