Setting Your Financial Goals for 2022

New plant frome coins and four blocks with number 2022 on table

Most life goals require money to enact. Whether it’s buying a house, starting a family, paying off your student loan debt, or just going on a trip, money will be involved. For that reason, your life goals should be closely aligned with your financial goals. To set your financial goals for 2022, you should assess where you are and what your life goals are so that you know what your financial goals need to be.

Assess Your Life Goals

Step number one in determining your 2022 financial goals is to assess your life goals, both immediate and long-term. If you’re planning to buy a house or car, have a baby, get married, go on an international trip, or another big purchase, you’ll want to make sure you have all of your financial ducks in a row. Knowing what you want to plan for is an essential part of any financial plan. Your life goals may also change over time, so it’s a good idea to reassess your goals every year.

Categorize Your Life Goals

Once you know what you want to achieve with your money, you should decide when you want to do each of these things. Separate those goals into short-term, mid-term, and long-term goals. Each type of life goal will need to be planned for differently. You may need separate savings for short-term and long-term goals, for example. Deciding when you want to accomplish each of your goals will help you to set a budget for what you can spend now versus what you need to save for later.

Prioritize Your Life Goals

You’ll also need to categorize your life goals in terms of what is essential to you and what is just a want. The needs should be prioritized over the wants, but how much each goal costs should also impact your budget. For example, if a need is less expensive than a want, then you may still want to divert some money towards saving for the want, depending on how much more important that need is.

Assess Your Assets and Liabilities

It’s important to know what you already have in terms of finances. Check all accounts that you have, from savings and checking accounts to 401(k) retirement accounts or IRAs. Knowing what you have is important, but so is knowing what you owe. If you have student loan debt, credit card debt, a mortgage, or other type of debt, then your financial goals should include paying that off. Your financial goals should include paying down that debt while simultaneously saving for other goals.

Create a Budget

The next step is to create a budget for yourself. You need to decide what you can afford to save for future goals and what you need to spend now to pay off any debt you may have. It’s important to stick to your budget once you make it so you can meet your financial goals. Financial planning in Orlando can help you to define your financial goals and to create a budget that you can stick to.