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Personal Financial Goals for 2018

Personal Financial Goals for 2018

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It isn’t even December yet, but Christmas is already in the air — the tree is up, the lights are twinkling, and the songs are playing. And before we can even blink, 2018 is already knocking on our doors.

We always say that we will become better versions of ourselves at the start of a new year. And we always poke fun at our resolutions, saying we will probably give up on them halfway into the year. Sometimes, however, we need to take the opportunity and be serious about subtle year-long commitments to ourselves.

These commitments — financial ones, particularly — may just be what we need to eventually live comfortably.

Plan for Your Retirement

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It may seem strange to think about retirement when you’re in the prime of your life. But if you want to live well in the long run, then you have to think in the long run.

Retirement may still be decades down the line, but it doesn’t hurt to start preparing for it now. In fact, if you start preparing for retirement as early as now, then you will reap greater benefits once you officially turn in your badge. You can do this by investing in insurance and setting aside a retirement savings account.

The rule of thumb is 20% of your net income should go to your savings. For example, if you’re taking home Php20,000 after taxes and other deductibles, Php4,000 should go to your savings. The rest you can use for your bills and personal spending. Follow the 50/30/20 rule, and you’ll be just fine.

Set Aside an Emergency Fund

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Health issues, sudden unemployment, a broken car. Even when you draw up a budget and (try to) religiously adhere to it, you will inevitably come across unexpected expenses.

Having said that, open up an emergency fund and deposit your extra earnings there. Once you’ve settled the bills and realized that you have some extra money, don’t automatically spend it on random things at the mall or in an online store. Instead, think of how well-prepared you will be for anything if you have a well-stocked emergency fund.

Many financial experts suggest that your emergency fund should be three to six months’ worth of your expenses. So, say you need Php5,000 to pay your bills, and for daily expenses every month, your emergency fund should have Php15,000-30,000.

Accept the No-Spend Challenge

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Nothing’s wrong with dreaming. In fact, keep dreaming because it motivates you to work harder. But to live your dream life, you inevitably have to sacrifice some things along the way.

The no-spend challenge is directly connected to your emergency fund. It is a challenge wherein you stop yourself from spending money on anything unnecessary. This way, you’ll learn to get only what you really need and put aside what you merely want. And when you get used to doing this, you’ll be surprised at how much of a positive difference it has for your wallet.

Live Below Your Means

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Emergency fund and no-spend challenge aside, you don’t have to give up everything and live like a monk. You can still reward yourself from time to time without going overboard.

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But if there’s one life hack you should know, it is to live below one’s means. In other words, if you have something, you don’t have to show it off. Don’t think about how much money you’re earning; think only of how much you need to live comfortably.

Mark Twain said, “Comparison is the death of joy.” Comparing your lifestyle with that of others’ and trying hard to keep up may only result in debt and bankruptcy.  By living below your means, you learn to be humble and appreciate what you have.

Give Back to Others

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Spending money isn’t always a bad thing. Giving back, regardless of the amount, makes an impact. It makes you more aware of what you have, too.

When you become more aware of your financial habits, you will discover just how much money you unwittingly spent on unnecessary things. And when you learn to be frugal, you will appreciate just how much you already have.

Be aware of what you have and give back when you can — to the community, to an organization, or maybe to your parents. A simple act of charity will make you treasure what you have even more.

Add these financial goals to your 2018 resolutions and discover how they will improve your bank savings and, more importantly, your lifestyle.

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