One of the most important things you can do to safeguard your future is to set financial goals. Whether you want to buy a house, get out of debt, or save money for retirement, it's essential to have realistic goals and track your progress along the way.
Let's go over some steps you can take to get started:
You can't set financial goals if you don't know where you stand right now, today. So think about your current income and spending. It helps to make a list of your earnings and expenses—this will show you exactly where your money goes each month.
Seeing everything laid out helps you figure out how much money you have to put into savings, and how much you can dedicate to investing. Both are equally important to reaching your financial goals. If you're earning more than enough for necessities but still struggle with saving money each month because of high expenses, it's time to find ways to lower those costs.
To set financial goals and achieve your dreams, you must have a clear idea of where you want to be. In other words, define the problem before solving it!
Looking for inspiration and guidance in goal setting? Here are some common examples people use:
"I want to earn $X monthly." Defining exactly how much is enough will help you figure out the strategies to put in place to get there.
"I want X% more money than I have now." This type of goal can give motivation toward something that feels achievable, yet challenging.
Whatever your goal is, be sure to keep it realistic and fun. You want to wake up every day feeling excited to work toward making it happen!
The best way to build up a rainy day fund is to tuck away a certain amount of money each month into your savings. When deciding how much to put in, make sure the amount is fixed and not too high. By not stretching yourself too much, you won't stress about meeting that amount each month.
Once you decide how much you're going to set aside, make the monthly transactions automatic so you don't have to think about it. This way, you won't be tempted to spend the money on something else before it has time to grow in your account. A good rule of thumb is to save at least 10% of your income each month. But if you can afford more, you're ahead of the game!
Besides diverting money into a savings account, you can try alternating between stocks and crypto to make the most of your money. This can help you reduce risk since you'll have less money invested in any one type of asset.
When investing, be careful not to spread yourself too thin with different types of investments. Each investment needs a clear purpose and you must understand the risks involved before jumping the gun. Otherwise, it may be hard for you to determine which investments are successful. Ensure that your strategy aligns with your goals so that all your financial decisions work together as part of an overarching plan.
While we're on the topic of investing, let's not forget about risk tolerance. Investing in cryptocurrency can be lucrative, but only with proper risk management. Some people are more comfortable with risk than others, and only you can determine where you fall on the scale.
At AR Collective, we always stress the importance of not investing what you can't afford to lose. If you're taking money out of your rent to gamble on Bitcoin, you might get in trouble. But if your goal is more long-term for retirement, then investing can provide a better chance at reaching those targets sooner than if they were left untouched.
You may have heard the phrase, "To reach one's goals, one must set them." While this is true, setting a goal and actually reaching it are two different things. To accomplish something you want in life—whether it be a new car or vacation—you need a plan.
Once you've taken the time to devise a realistic plan, you can focus on achieving your goals. If investing in cryptocurrency is part of your plan, you may find our educational Discord community valuable. We cover topics like risk management, how to position size, and trading strategies to help you be profitable. Try us out FREE for seven days!