Setting long term goals is one of the most important thing you can do to keep yourself on track and avoid falling into a rut. When it comes to setting goals, it’s best to think long-term and build a solid foundation for success. That’s why once you’ve paid off all your debt, the next logical step is setting long-term goals that will help you continue growing your finances over time.
After all, there are plenty of ways to make money even after getting rid of debt. And, once you set those goals, you’ll be able to focus on achieving them rather than spending your time wondering where the money will come from or how you’ll pay for everything. In this article, we’ll walk through the top 9 steps that will help you set long-term financial goals after paying off debt.
1. Write your goals down
Something special happens when you actually put your goals down in writing, you are more likely to achieve them. Writing down your goals will make them more tangible and help you visualize them more clearly.
So, go ahead—make the commitment to yourself by putting them in writing. Then, stick them in your car, on your desk, or in your bathroom mirror. Type them in the Notes app on your phone, take a screenshot, and put it as your wallpaper so you see it all the time! Keeping your goals where you can see them will keep you focused.
2. Make sure they are your long term goals
One of the challenges when setting long-term financial goals is that people get caught up in what other people have done and don’t realize that they should be setting their own goals. It can be easy to get caught up in the rest of the family’s financial situation and start to copy their goals. Of course, it can be good to ask questions and get an idea of what your family members are doing financially so that you can learn from them and set your goals accordingly. That being said, you still want to make sure you are setting your own goals based on what you want for yourself.
3. Build an understanding of your finances
The third step to setting long-term goals is to get an overall understanding of your financial situation. Financial literacy is a personal skill that benefits you throughout your life once you master it. Learning how to pay your bills, how to borrow and save money responsibly, and how and, why to invest and plan for retirement is very important.
4. Find a passive source of income
Passive income is money that you make without doing much in the way of work. The most common types of passive income are investments, blogging, and dividends.
Investments can include stocks, bonds, real estate, and other types of investments. You can purchase stocks and other types of investments in a variety of ways, such as through an investment account, open investment fund, or exchange-traded fund.
Blogging is also an upcoming passive income stream. Blogging has helped countless entrepreneurs earn passively through affiliate links, courses, sponsored posts, products, book deals, and more.
Dividend income is money you receive when a company that you own stock in pays out a dividend to shareholders.
5. Track your progress: Be honest with yourself and celebrate small wins
One of the most important things to remember when setting long-term goals after paying off debt is to celebrate the small wins. Yes, the big wins are where you will see the biggest changes. But, before you get too excited about those, it’s important to celebrate the small wins. For example, use your credit card and pay off the smallest balance first. This is a great way to celebrate this small win because it shows that you are taking charge and making an effort. Also, make sure you include your short-term goals in your long-term financial goals. This will help you stay focused and keep your eye on the prize.
6. Have an emergency fund
One of the best long-term goals you can set once you’ve paid off debt is to have an emergency fund. An emergency fund is a savings account that you have set up specifically for emergency situations. It is a cushion between you and a life-changing event that makes you unable to pay for basic needs. An emergency fund should be at least three to six months of your regular expenses.
An emergency fund is a great way to protect yourself from life’s uncertainties. It will allow you to get back on your feet when something unexpected happens such as a car repair or medical bill. It will also ensure that you don’t have to take out a loan or dig into your credit cards just to pay for an emergency.
7. Decide on your core priorities
Make sure you are prioritizing your core priorities when setting long term goals. Your core priorities are the areas of your life that are most important to you. They could be family, health, career, or any other important thing that matters to you. The best way to decide what your core priorities are is to get out a piece of paper and start writing down all the things that matter to you. Once you have a list, compare it to what you already do and decide if there is anything missing.
8. Make a Plan for Big Life Goals
Debt has a great way of killing your dreams. After paying off debts you can focus on having bigger goals. What do you want to accomplish, that you haven’t already? Do you want to buy a house? A new car? Are you starting to think of starting a family maybe? Are you dreaming of a once-in-a-lifetime travel expedition?
After paying off debt, you deserve to live a little and plan for life’s grand adventures. Just make sure you budget for it, while not reverting back to the dreaded D-word.
9. Build and increase your credit score
One of the best long term goals you can set once you’ve paid off debt is to build and increase your credit score. A high credit score will help you get a better rate on loans, better insurance rates, and even help you get better rates when renting an apartment or buying a house. There are a few ways to build credit and there are a few ways to increase your credit score. Once you have the information, it’s best to take advantage of the best credit tool for your situation.
Goals Will Get You There
Financial goals will help you change your mindset, your habits, and your life.
When you’re intentional with every shilling you have, every shilling will stretch further. That means you get to do more of the stuff you want to do and plan for the things you’ll do in the future.
If you want to do more than you ever thought possible, go on and set some goals. Decide what you want your future to look like, and figure out what you need to do today to make it happen.
You can live on your terms instead of the banks.
You can get out of debt once and for all.
You can build wealth and pay for things that matter to you.
Goals will get you there.
There are lots of things that influence the way you set your financial goals—your life growing up, your motivations, and your own dreams for the future are just a few.
And remember, it all starts with creating your goals. This is the foundation. It’s the plan.