Set a Financial Goal for Future
Money isn't everything but tell that to someone that hasn't got any. There are several reasons for not having money but for those with a regular income there are few excuses. It is important to have goals in life, perhaps the single best one is general; have a long and happy life. Money certainly helps such an ambition which makes good financial management all the more important. If you are one of the people looking for excuses you need to stop now and get your life organised by setting your goals and thinking about how to achieve them. They may be short and long term and both are achievable with a little thought and self-discipline.
- Pay off existing debt
- New car
- Build up an emergency fund
- Make good provisions for retirement
- Buy a house
- Save for children's education
There are not many words in those short and long term goals but there is plenty of work. In Sri Lanka future prospects have brightened since the end of the recession so there has never been a better time to think about goals and how to achieve them. In some cases it is not about a finite amount of money, it is more about cutting out waste which can be seen by listing income and expenditure. Each item on the expenditure list, daily spending and regular monthly commitments needs analysis. It does not necessarily involve sacrifice but there may be cheaper ways to source many things during the month.
These vary by age:
- 55+ The top priorities must surely be paying off existing debt as a matter of urgency and saving towards retirement. If there is currently very little saved it will involve some sacrifices, and potentially change of lifestyle because that will certainly happen in retirement.
- 35 – 54 There is no definitive answer to the order of priorities but certainly paying off debt other than that involved in property purchase should be close to the top. Those in debt will inevitably find it difficult to save towards any of the long term priorities. In mid 30s it is likely that a home and the children's education will be putting pressure on finance. That is normal and makes the need for good financial management even more important. By 50, retirement is so much closer and savings even more urgent.
- Up to 34 It is all too easy to think that life is great and you have no financial worries. It is tempting to prioritise a holiday and a new car but that should never be done without putting aside money on a monthly basis towards the emergency fund and retirement. If a new family is on the way there will certainly be several calls on monthly income. That is no excuse to ignore the long term future.
There is a point when you need to look at the implications of each of your goals. That means cost as well as timescale. Where the goal is reducing expenditure and debt that is a matter of investigating cheaper ways to shop, whether daily living expenses or regular monthly bills. The aim is to create a surplus between income and expenditure. When that is achieved that surplus must be used properly. That does not mean a holiday or new car unless your overall financial picture is looking good and your savings are growing. Perhaps those things need to be delayed until you are further down the path to financial stability?
There is a common theme that applies to people of all ages; cut out expensive debt. The most common form of such debt is on credit cards where the companies providing the cards make their money from the interest they charge on outstanding balances. Given that card companies are happy that their customers carry debt within an agreed credit limit where is the problem?
While your credit score is an important factor when you apply for $5000 extra funding no credit check increasingly online loan companies are concentrating on the applicant's ability to repay the instalments for the whole period of the loan rather than the past history of that applicant. That means a regular income and a realistic request. The answer to resolving the problem of a stubborn credit card balance is to take out a consolidation loan to pay it off.
You may not have any obvious means of increasing your income in the short term so you should concentrate on whether there are other possible savings on your regular expenditure. Daily spending on small items is one area because a few dollars a day adds up over a week. However there are other areas to check whether you are getting value for money. There are comparative websites that you can research to see whether you are getting the best possible deals on insurance, utilities and telephone. It is worth spending a little time checking because it could just change your life if you get your finances under control.
The interest rate on such a loan will be much lower than the charge coming from credit card companies. If you settle the debt and never build up a balance ion the future your personal situation will improve immediately.
May 22, 2016 |
It is in the high rate of interest applied which means that card holders who just pay the minimum requirement each month will hardly see their balance fall because of the addition of this interest.
May 22, 2016 |