What Do You Want Your Bank To Look Like In 5 Years Time?

Setting goals is a great way to keep your personal finances on track.

If you want a larger bank account in 5 years, you’re going to have to put in some hard work and effort. Reaching your goal takes careful planning, and the discipline to stay on track. Consider these tips to improve your personal finances:

How To Set Goals

If we’re being honest with ourselves here, you need to set realistic goals. You can’t expect to pay every debt, and save thousands within a few months- it just isn’t going to happen. You need to balance the need to pay your monthly bills with your desire to save money. If you want to set a target, it’s going to have to be realistic, and that will help you avoid getting discouraged as you move forward.

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Here’s an example- you earn $60,000 a year, and you want to save $200 a month to create a fund for emergencies. Follow these steps to reach that goal:

Review your spending: Use your bank statements and credit card statements to determine where you’ve spent your money in the last few months. Write down each category of spending, and the dollar amount. That’s your starting point.

Fixed vs. variable spending: Label each category is either fixed spending (car loans, lease or mortgage payment), or variable spending (meals, entertainment)

Plan variable spending: Create written plan for your variable spending, and make some cuts that free up dollars for savings. Maybe you make coffee at home three days a week, rather than buying coffee on the way to work. Or, do decide to eat out twice a month, rather than four times each month.

Use the dollars you’ve cut out of your budget to fund a savings account- and stay on track with your variable spending.

Set yourself monthly goals to reach, and add something on every time you cross something on. Goal setting is the best way to get where you want to be, no matter what we’re talking about in life.

Managing Debts

Increasing your bank account balance in 5 years will require you to manage and reduce your total debts.

One of the most common, and long standing debts, is a student loan, and if you visit websites such as http://refinancestudent.loan/, you might be able to get a refinance offer on it. This will make it easier to pay down your debt, and it’ll help take a big weight off your shoulders. You should also think of reducing credit card debt, because using too much credit has a negative impact on your credit score.

Your Bank Account

Of course, a bank account with a savings balance is a dream, but it isn’t always a reality. If you’re struggling to save because you keep dipping in and out of the savings pot you have, open up a separate bank account. Set up an automated transfer from your checking account into your savings account, and use self-discipline to avoid savings account withdrawals.

With hard work and a consistent effort, your bank account can look better in 5 years.

This post is for educational purposes only.

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

Co-Founder: accountinged.com

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/

(you tube channel) kenboydstl

Image: Bullseye, Jeff Turner CC by 2.0