Five Secrets to Help You Reach Your Money Goals

Realistic View of Money Goals

Money is a not only a big motivator in our lives, but also a necessary part of it. Therefore, it is perfectly normal to set money goals, especially if we want to advance financially. It may be difficult for you to set, and stick to your money goals. Or you may be one of the lucky few who find it easy. For the most of us, it is not easy to set, and keep to our money goals. The real secret is there is no secret to reaching your money goals - it takes a little common sense, with a dash of determination.

This article offers five secrets/hints, which are practical, and when followed, it is possible to reach your money goals. I must stress that these secrets/hints are realistic.

What is your goal with money?

You have dreams and goals, and money is central to practically all your aspirations and goals. Money almost always is central to your achieving any number of goals. A teenager I spoke to some time ago complained that she had a goal, but she wouldn't be able to achieve it. She said it was her goal to travel abroad, but she didn't have the money.

I explained that money was in reality her first goal, and that is what she should focus on. She could take on part-time work, save from her allowance, and cut spending. By focusing on her money goals, she would then be able to work towards her bigger goal - that of going abroad.

You may have the goal to become financially independent, but that is not in the scope of this article.

Whatever your money goals are, you should always follow a strategy to reach them, otherwise it will be extremely difficult, if at all possible. The following are five practical hints to help you reach your money goals.

1. Have a Budget

Please note that this is a realistic discussion on the subject of having a budget. There are two aspects in having a budget: income and expenses. A successful budget means the income is more than the expenses. And therefore, the success of your budget means the control of these two aspects. Having specific goals can go a long way to helping you control these aspects. These can be anything from buying a home entertainment center, clearing credit card debt, going on holiday.

To help with establishing money goals, you could draw up a written "agreement" with your partner, spouse, friend or family member. This can be used to remind each other when the impulsive buying urges surface. The first step in reaching your money goals is the control of your finances, and a realistic budget is the means to do this.

What do you do if your budget does not balance? There are in reality only two options: decrease expenses, or increase income. Most of the time it is not easy or practical to get the former right. It is possible to increase income by making an extra income. This can be done through a variety of means. You could consider turning your hobby into an income generating source. Or you could investigate operating a web business - the benefit of this is that it can be started with minimal start-up costs.

2. Stay away from debt

Now, wasn't that easy to say? Here it is paramount to have a realistic view. How possible is it really to stay away from debt? As the old saying goes, "everything in moderation" or something along those lines. Getting into debt is one of the easiest things in this world, and for this reason you need to put up your guard against it.

For illustration purposes, I'd like to share the following with you: there is "essential debt" and "luxury debt", and the differentiation of these can help keep you out of the debt trap. Your house, vehicle, household appliances, etc. fall in the "essential debt" category. On the other end, things like entertainment centers, camcorders, and dress jewellery fall into the "luxury debt" category.

Some ideas to control or avoid debt are:

·Watch credit card spending.
·Check interest rates, and negotiate where possible.
·Pay debt off as quickly as possible; add a little extra to the payment, if possible.
·Raise your awareness of "luxury debt".
·Re-consider designer labels and name brands.
·Watch the small expenses, they all add up.

3. Invest something, regularly

The basic means of saving is a standard saving account. By starting with this, it can develop the discipline of saving, and when you see your savings grow, it will inspire you to go onto bigger savings and investments.

For many of us, the discipline of saving regularly is difficult, especially at the start. This can be overcome by arranging automatic savings, that is, you can arrange with your bank that a fixed amount be deducted by debit order, and placed into your saving account. As your savings grow, you will find your discipline grows, and you become more motivated to save.

Investing your money has more benefits than spending. By investing, your money grows, and you are able to afford the luxuries of life, without going into debt. Investigate and research the investment options, and what interest rates are offered. Watching your money grow is a lot more fun than paying off debts. Start today.

4. Funds for emergencies

Unexpected expenses are a part of life, and when these occur, you will be in a better position if you are prepared for it. You know how it goes, something packs up, and must be repaired: car repairs, household appliances, or veterinary costs. In this case, "cash is king". Because you find yourself in an emergency, you can usually negotiate a better price when paying cash. Otherwise you are at the mercy of the supplier, when charging it to credit.

Savings can be used for these emergency costs. It is still better than debt, especially when considering the eventual cost, with interest.

5. Nothing like compound interest

This is the amazing feature of money. You can see your money double, or even triple, thanks to compound interest. This is where you get your money working for you, when you get paid interest on interest. It is really a great invention, and one of the best ways to grow your money.

An example of compound interest:

$100 invested @ 5% = $105
$105 re-invested @ 5% = $110.25
$110.25 re-invested @ 5% = $115.76

Again, do your research, and find the best interest rates.

Nothing magical about money

It is a sad reality, but many of us want to walk before we can crawl. I cannot remember who said it, but it is very true: "a penny saved today, is worth two tomorrow". There are basic realities in reaching your money goals, and the first is: set a goal and work towards it.

There are a variety of financial tools available to assist you with your money goals. This article discussed five basic tools...

·Set a realistic budget
·Stay away from debt
·Invest something regularly
·Keep funds for emergencies
·Nothing works like compound interest

Follow these five secrets and you will reach your money goals.