We’re now a few months into 2021. How are your financial goals so far? Are you still on track or are you finding it challenging? Did you set your goals at the start of the year? Or have you been trying to achieve those long-term plans you’ve established years ago? Is one of your goals saving up to afford San Francisco homes for sale?
Whatever the case, you have to keep on revisiting your money-related goals time and again. You also have to ensure that your everyday decisions are aligned with your longer-term goals. If you need some guidance, here are some tips to consider when setting (or adjusting) your financial goals and achieving them.
- Set a budget and stick to it
Make sure it’s sustainable, of course. Consider your income, expenditures, and debt, if any. Don’t be too ambitious in your savings plan, leaving you with barely enough to cover your other needs. When you have a budget in place, you set spending limits on yourself. You also ensure that your bills are paid and you enable yourself to make the most of what’s left.
Choose from various budgeting and saving techniques, such as:
- 50/30/20. Where half your money (after taxes) goes to necessities, 30% to non-essentials or “wants,” and 20% to savings (or debt). This can also be adjusted to 70/20/10 or the much simpler 80/20 or 70/30, whichever suits you better.
- Cash-Only Budgeting or the “Envelope” Method. Where you withdraw the cash you need over the course of a period, and manually allot portions on savings, bills, and debt. You can use labeled envelopes or employ an electronic version via apps like You Need A Budget (YNAB).
- Zero-Based Budget. Where you make sure every dollar is accounted for and goes only to essentials (including savings). Great for people who want total control over their finances.
- Money-Saving Challenge. Where you commit to saving a certain amount over a fixed period of time. For example, saving $50 every week for 52 weeks (or one year, a scheme that typically starts in January). The rest of your money goes to your living expenses. This is a good option if you’re the competitive type and ideal if you have challenge buddies to keep you motivated.
Without outstanding loans or credit card balances, it’s easier to save up and enjoy the peace of mind that comes with being debt-free. You can allot more to saving up for the down payment on a new house, a vacation, your children’s education, and other items on your bucket list.
Try these debt reduction techniques:
- Debt Avalanche Method. Where you make minimum payments on your debts and use the remaining repayment budget on your largest debt.
- Debt Snowball. Where you pay off your smallest debt first and make minimum payments on the rest. This lets you see your achievements more quickly, which could be a great motivator to stay on track when it comes to your financial goals.
- Debt Consolidation. Where you take out a loan to pay off all your debts, so you’ll repay only one lender.
It’s best to do this with a dedicated savings bank account for each purpose.
Consider the following:
- Emergency savings fund
- Retirement fund
- Educational fund
- House fund (to save up for the down payment on a home)
With discipline and determination, you can definitely achieve your financial goals. If you finally save up for a new home or you’re thinking of selling your property so that you can move elsewhere, make sure to work with an expert in San Francisco real estate.
Feel free to reach out to me, Amir Hardy. As one of the top San Francisco real estate agents, I’m ready to help you with your concerns. Call 415.602.0570 or send an email to amir(dotted)hardy(at)compass(dotted)co.