Over the years, I’ve seen many people put their financial lives on auto-pilot. When I met Jessica, that was the case. She was in her 30s and had never really thought about retirement. While she had some savings, she had never really considered retirement, investing, or many other aspects of her financial life. Finally, she started a new job in a field that paid well. As a part of her new job, she opened her first retirement account. It was a wake-up call when she realized many other people her age already had a nice nest egg saved up. It was time to play catch-up to become a millionaire!
As a Top Ten Investopedia Advisor of 2023, I encourage people to take a more active role in their finances. You may feel overwhelmed or intimidated by the world of finance, but it doesn’t have to be that way! By breaking down goals into achievable goals and steps, everyone can improve their financial well-being.
What are the steps that you should take? In my 20+ years of experience as a Certified Financial Planner(™), I’ve found that there are four main achievements everyone should work toward. These goals apply, especially to women who are going through a transition such as a divorce, a career change, or moving toward financial independence. Take a look at the top four financial achievements I recommend people work toward:
1) Having Full Control of Time
You may wonder what having control over your time has to do with your finances. As they say, time is money! You have to consider how much your time is worth and then make decisions about how you spend your time, such as more quality time in your relationships. Ask yourself when you wake up in the morning, do you have a plan for the day and feel like you have control over your time? Some things you might consider changing to have more control over your time are:
2) Using SMART Goals to Make Financial Decisions
Any goal that you have can be turned into a SMART goal. From saving up for a vacation or new vehicle to starting your child’s college fund or buying a home, every financial goal should be turned into a SMART goal. Let’s consider paying down credit card debt, which is a common financial goal many people have. How can you turn it into a SMART goal?
SMART Goal: I will pay off double the minimum payment of my credit card debt to get rid of this high-interest debt within 14 months.
3) Knowing What Your Financial Independence Magic Number Is
If there were a magic amount of money that would make you feel secure financially, how much would it be? One way to help you figure this out is to use tools such as retirement calculators. These tools can help give you an idea of what that number might be for you. The magic number is the amount of money you need to achieve financial independence. There are many creative ways to get to this magic number! The FIRE method is one popular way. I use a multiple of fixed costs. For example, if fixed costs are $5K a month, then determine the annual fixed costs. Finally, multiply that times 20 or 30 to see how much money you’d need to retire now. No matter how you calculate it, you need to grow your money to get there. That’s where the next step comes in.
4) Understanding How to Grow Your Finances with Purpose
There are many different ways to grow your finances. From investing to real estate, it’s important to find your style when it comes to growing your finances. Once you’ve found the right strategy that works for you, you’ll be more likely to follow through and work toward growing your money. Ideally, you can also align your values with your growth. And use your passion or expertise to inspire your growth strategy! For example, impact investing is one great way to combine your passion with growing your money.
Are you ready to get into the driver’s seat of your financial life? Taking these steps can help you take a more active role in your financial life, meaning you’ll achieve more and start making your dreams come true. Let’s make it happen!
Elaine King is an experienced financial planner and CFP® who has helped thousands of individuals and families prioritize and achieve their financial goals. Contact her to set up a call today! For more tips, follow Elaine King on Facebook, YouTube, Instagram, and Twitter.
