Level Up Your Money Game: How to Set (and Keep!) Long-Term Financial Goals
Living your best financial life doesn’t happen overnight. Instead, it’s all about consistently “doing the work” and making healthy choices with your money everyday.
If that feels a bit vague and overwhelming, here are three tangible places to start: learn the basics of budgeting, paying your bills on time, and getting your debt under control, and you’re already well on your way.
Once you’ve gotten your day-to-day spending and budgeting in a good place, it’s time to look towards the future. Planning for bigger goals like owning a house or buying a new car is an important step on the road to financial independence and stability.
Whatever your dreams look like, we’re here to help you make them a reality: here’s how you can set (and achieve!) your long-term money goals, whatever they are.
What Should My Money Goals Be, Anyways?
Have you ever set goals for your job? Your relationships? Your daily habits? Then you already have a headstart in setting some meaningful money goals! In essence, a money goal is something concrete to work towards, that can provide structure to your decision-making and help you prioritize (i.e., by skipping that impulse buy now so you can get ahead on saving for a bigger purchase down the road).
Everyone Starts Somewhere: Ready, Set, Goals
Let’s say you’ve aced budgeting and managing your money day-to-day. Where to next? If you already have a clear sense of what you want to accomplish with your finances in the next 5, 10, or 50 years, 1) congrats on having your sh*t together and 2) go ahead and skip to the next section!
If not, never fear: we’ve got you covered with some common mid- and long-term financial goals to help you start thinking bigger. Remember: your goals should be unique to you, but we hope this gets the juices flowing!
- Saving up for a big purchase…
We all have a dream house, car, or other major purchase in mind that requires planning ahead. This is the time to define what that next big purchase is for you, so that you can take steps to make it happen.
- …or planning for monthly payments on your big purchase
Even if you already have the money for a down payment, most major purchases come with a long-term monetary commitment. Whether you’re looking at a 20-year mortgage on a new home or monthly car insurance payments, make sure you’re accounting for those recurring expenses in your financial planning.
- Getting life and disability insurance
Expect the best, and plan for the worst: if you have a spouse or any dependents that rely on your income, then life insurance is a very important and necessary step to ensure they are taken care of if something happens to you. Disability insurance is also very important in the off chance that you are seriously ill or injured to a point where you cannot work.
- Saving for your retirement…
If you’re early in your career, retirement may feel extremely far off (it would be nice if it could come a little sooner, tbh!). But the earlier you can start saving for it, the better. One great way to do this is to put part of your income directly into your retirement fund. Pro tip: if your employer offers 401k matching, max out your contribution to take advantage of the added boost (more on that below).
- …or investing for your retirement
Another way to save for retirement is by investing. Rather than keeping your nest egg in a low-yield savings account, make that money work harder for you by putting it into a 401K or IRA investment account.
While investments can be volatile in the short term, this strategy generally makes sense if you are saving for a retirement that is years or decades away. You can tailor your investment strategy to accommodate your appetite for risk, or enlist the help of a robo-advisor or traditional financial planner if you would prefer to take a more hands-off approach.
Where Should I Keep My “Money Goals” Fund?
Now that you have identified exactly what goals you’re working towards, you can begin allocating a certain amount from each paycheck or setting aside a lump sum at the end of each month. But one important question remains: where should that money actually be kept?
While you might stow your rainy day fund under your mattress or in a piggy bank, that won’t fly for your bigger money goals. There are two main options for longer-term savings:
Open a brokerage account: A brokerage account can be used to purchase a variety of risk assets, such as stocks, bonds, and mutual funds. A brokerage is perfectly suited to mid- or long-term savings, such as a child’s college fund or your retirement fund, because your money will appreciate and grow in value over time.
Stick with a savings account: A savings account is a good intermediary option for storing money that you don’t need to have right at your fingertips, but may need in the near future. For example, a savings account is a great place to keep your emergency fund, but not where you are pulling money to pay for rent (use your checking account for that).
3 Key Ways to Stay on Track with Your Goals
You’ve set yourself up for success—now it’s time to make sure that you achieve what you’ve set out to do! Here are a few ways to set healthy habits that will ladder up to big money milestones.
- Make your everyday spending work in your favor.
Being strategic with your finances starts with awareness about how and where you spend your money. If you find that the majority of your budget goes to groceries each week, consider frequenting a store that offers loyalty rewards or consistently great deals. If all of your retail purchases come from the same spot, opening a store credit card might make sense for you. In short, make the most of the money you’re already spending!
- Stick to your budget.
Setting a budget and sticking with a budget are two very different things. If you find it difficult to align your expenses with your weekly or biweekly pay cycles, consider using Zip to create some more consistency in your cash flow. You can use Zip to split up any purchase or expense (that includes bills and groceries!) into four payments over a period of six weeks. You’ll even get reminders ahead of each payment due date so that you never miss a payment.
- Keep tabs on your progress.
It can be easy to get wrapped up in day-to-day budgeting and expenses, but don’t lose sight of your hard-earned progress towards longer-term goals! Set a time each month to check in on where you stand. This will help you feel financially in control and alleviate any money anxiety that you’re experiencing in the short term.
Putting time and effort into financial goal-setting isn’t something that everyone does, but it is something that everyone should do. If you take these tips and tricks to heart, you’re already a step ahead of the pack.
Working towards your financial goals requires hard work and sustained commitment, but when you’re enjoying your shiny new house, car, or a life of leisure in retirement, you’ll be glad you stuck with it!
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Zip’s editorial content is not written by a financial advisor. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.