Most people find that financial troubles happen occasionally. This is precisely true if you are young and just beginning your career. One of the options you have for getting out of debt is declaring Bankruptcy. However, this is not the best option nor should it be done by the majority of people. Individuals can announce bankruptcy depending on how much debt has been obtained and how much money is made every month, according to the given law. An important part of this financial process is setting goals. By setting your financial goals you can stay out of debt and reduce the risk of bankruptcy. Also, you may rebuild your credit after have already declared bankruptcy. If you set goals and reach for them, you can live a happy and successful life easily even in this period of financial crisis.
You should start setting goals when you are responsible to start making your own financial decisions. Mostly, It takes place approximately at the time of graduation. Here are few essential goals you must set and try hard to reach them:
1st Goal: Designate a separate savings account for only depositing money. You should avoid withdraw money from this account unless you are in critical need.
2nd Goal: Determine an exact figure you would like to save in a period of time, lets say you will save $4,500 in a year. Try to exceed that number, if you can.
3rd Goal: It is a good idea to have at least one credit card, but you should pay off this credit card bill in full every month. If you do not pay full amount every month, it is time to say good bye to this habit. No more partial payments, no more minimum payments. This practice will help you to build credit without putting you deeply into debt.
If you find yourself flooded with bills every month, set more goals about how to save money by reducing spending. It is even better if you spend less comparing to your monthly income. All of this exercise will help you to handle your debt and hopefully you will not have to declare bankruptcy.
However, if you have declared bankruptcy in the past, it is very important to set new goals to once again start building a good credit history. You should do this by working extra time to pay the debts you have that were not dissolved due to the bankruptcy. You can also slowly begin saving money again, using the methods just discussed. By setting and reaching such goals, your confidence will build up. Not only you feel good and confident, others also think that you are trying to improve your financial condition and that you can be responsible with money in the future.
2 replies on “The Importance of Setting Financial Goals”
Goal setting is the process of deciding where one wants to go in life and then mapping out a series of steps to get there. Success is something we create for ourselves.