You all set financial goals to make your life better. These goals involve setting aside for retirement, building an emergency cushion, clearing all outstanding debts, and so forth. A very few of you actually manage to achieve your goals on time.

People often realise the goals they have set are absolutely unrealistic. Setting financial goals is a proactive move to prevent your money against any unexpected events, including soaring inflation. Still, unrealistic goals will set you up for disappointment, and this makes things more complicated.

You may have several goals, and achieving all of them may sound insurmountable. Many of you give in as you think it is beyond your capacity, but most of the time, you fail to achieve your goals because they are unrealistic. For instance, you have decided to pay off outstanding personal loans with bad credit whopping $5,000 in three months.

Before you start making payments, you need to ask yourself if enough cash is coming in to do so. You set unrealistic deadlines in the rush of making your financial situation better.

What to do when financial plans are not working out

If you have come up with a strategy that does not seem to be working the way you want, you may have established unrealistic goals. You will fine-tune it to get the desired results. Here is what you should do to make your financial strategy work for you:

  • Determine what is wrong

Are you trying to save six-month worth of living expenses within six months or pay off massive credit card bills? You should be honest with yourself. Before setting such kind of goal, ask yourself if that is possible. Do you have enough monthly income to stash away this much within just six months?

If your emergency cushion is nil, you will put by the whole of your monthly salary for six months in a row to achieve your purpose, which is absolutely impossible. If you have detected that something is holding you back from achieving your financial goals, you should review them to see if you have set realistic deadlines.

If you have decided to pay off your debt or put aside money to your emergency cushion that exceeds your monthly earnings, your goal is simply unattainable. Of course, you need money to meet your regular expenses like rent, travelling, etc.

You will also need some money for recreational activities. After meeting your essential and discretionary expenses, the money you are left with will be used to achieve your goal. However, sometimes, your goals can be unattainable because of overspending money.

If you have been dissipating money on restaurant food, online shopping etc., you will end up pushing the deadline for achieving your goals.

Remember that you will have to adjust your budget. Achieving goals may become tough without trimming down your expenses. Pay yourself first and manage to live off the left money.

  • Identify the obstruction

You may fail to achieve your financial goals if they are unrealistic, but sometimes you fail to do so because of an obstruction. For instance, if you are socking away for retirement and paying 12.6% interest on unsecured bad credit personal loans, it is suggested that you pay down the debt.

At the time of setting your financial goals, you should prioritise your needs. You will likely have a list of goals you would want to achieve in the coming years, but you need to look at your current situation to estimate which goals you can achieve soon.

For instance, socking away for retirement is a long-term goal, but settling your outstanding dues and stashing away for the down payment of your house are short-term goals. You need to suss out how you can contribute to all of them.

Since you cannot delay in payments of your outstanding debts, they must be your priority. Once you have cleared all your dues, you can easily plan around your retirement funds, arrange a down payment for your house, and so on.

Experts suggest you should balance between both types of goals. Though a major contribution should be toward debt payment, you should also stash money for emergency corpus. This will prevent you from borrowing money when unexpected expenses pop up. This way, you will have a nest egg ready by the time you clear all your dues.

  • Set SMART goals

SMART goals refer to Specific, Measurable, Achievable, Relevant and Time-bound. Keep it in your mind at the time of setting your financial goals. Building an emergency cushion is not a specific goal because you do not know how much money you need to set by.

Decide the limit instead, for instance, saving 10% of your monthly income for six months. You must have certain benchmarks to see your progress. For instance, you will monitor your progress every quarter or six months. Ensure that these goals are achievable.

For instance, if you have decided to set aside 10% of your monthly income every month, you should check if it is possible. It is likely that you do not earn much money to be able to do so. You cannot save 10% of your income if you cannot meet your regular expenses with that little income.

The goals you set should be realistic. Impossible goals will make you frustrated when you fail to achieve them. Identify your current financial situation and figure out what you want to achieve. Do not make goals by being influenced by others because everyone’s financial situation is different.

Last but not least, try to set an apt timeframe. For instance, if you have personal loans for debt consolidation and alongside are to build an emergency cushion, you should find out how much you can save each month and how long it will take.

The deadline should not be very flexible, nor should it be very strict. Set the appropriate timeframe not to struggle to achieve your goals.

  • Review and revise

It is paramount to align your budget with your goals. Based on your current financial situation, you set goals that you think you will be able to achieve, but financial situations keep fluctuating. For instance, you lose your job. Of course, you may not be able to stick to the plan until you land a new job.

This is why you will need to revise your plan. You will need to make adjustments based on your current financial situation. As you will be living off benefits and savings, you cannot keep on stashing away money for a rainy day.

However, at the same time, you need to ensure that you do not dip into the whole of your savings because unexpected expenses can catch you off guard anytime. If you try to borrow money, do not forget that you will have to pay interest on top of the borrowing amount.

You should give a quick revision of your budget. Reconsider all of your goals and try to align them with your current budget. Embrace changes and try to adapt to them to achieve your financial goals.

The bottom line

It is not surprising to see that financial plans are not working the way they should. One of the most common reasons is that they are unrealistic. However, sometimes you do not align them with your budget. For instance, overspending can pull you back from achieving your financial goals.

You should identify the obstacle and try to find out a way to get on the track. As the financial situation is never the same, you should keep revising your budget. This will help you tweak your budget to achieve your goals smoothly under new financial circumstances. The aforementioned tips can help you make the right financial strategy that works in your favour.

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