Managing financial goals is a challenge. On one hand, you want to save money and put off having fun for later to secure your future goals. However, there are times when you just want to live in the present and enjoy the money you just received. Unfortunately, it’s also easy to get carried away, live beyond your means, and forget the long-term goals you’re saving for. These pocket doors can be slid discreetly into the wall for a seamless and space-saving solution.
To stay on track in between general saving and retirement and enjoying your financial resources, you need to employ these practical strategies. You can also look at the role of licensed money lenders in Singapore in helping you achieve this financial balance.
1. Set clear financial goals
Setting clear financial goals is one of the first steps in finding the balance between enjoyment and saving. Doing so provides a roadmap for financial planning and decision-making.
A part of that is defining which goals are short-term or long-term. Short-term goals are the things you’ll spend money on within a few months or years. These include emergency funds, credit card debt paydown, personal goods, travel, weddings, minor repairs, and home improvements.
Long-term goals are usually big-picture achievements and investments that may take several years or even decades to reach. For example, retirement funds, paying off a mortgage, starting a business, and saving for a child’s college tuition.
Let’s assume you are in your late 20s. You have three big dreams: travel, homeownership, and retirement financial stability. You want to have financial stability and comfort in your later years, but for now you want to see the world. For that, you saved $5,000 for your short-term dream goal of overseas travel by next year. Saving $5,000 for short-term travel goals indicates discipline and the ability to satisfy current aspirations while remaining devoted to long-term goals in this situation.
Looking further ahead, you set long-term goals of saving 15% of your income for retirement and buying a home in your early 40s. So you save for a down payment and diligently work towards these objectives. Both are important long-term aims. One ensures that you have enough money in your old age, and the other ensures that you have adequate finances to obtain the home of your dreams, which will be a valued asset over time.
Setting and working towards long-term goals, such as travel, homeownership, and retirement financial stability, is a critical aspect of financial management that can significantly impact your future financial well-being, and it allows you to prioritise and allocate resources towards your dreams and aspirations.
2. Review and adjust financial plans regularly
When balancing between enjoying and saving money, reviewing and adjusting your financial plan you have set is necessary. Doing so allows you to adapt to changing circumstances, set new goals, and ensure that your financial strategies remain relevant and effective.
For example, married couple Ben and Jen set a financial goal to save for a down payment on a house. They also allocate part of their income for discretionary spending.
Over time, Ben and Jen’s priorities have evolved, and they now consider starting a family. This means new financial responsibilities such as childcare and education costs. Ben and Jen regularly review their financial plans and adjust their goals to include savings for their growing family’s needs, such as college funds for their future children.
Once their children were grown and ready to go off to college, Ben and Jen faced unexpected and pressing financial needs during the review and adjustment process. They may consider using the services of a licensed money lender as a temporary solution to overcome this emergency to cover education loans and they must ensure that they can repay the loan promptly to save their creditworthiness.
Reviewing and adjusting their financial plans, whether it’s saving, taking out loans, or allocating a budget for payment, will allow them to effectively manage their current commitments whilst still maintaining their financial well-being.
3. Have fun while saving up
Financial security and stability largely contribute to mental peace. In fact, many of us are too stressed out because we miss out on planning our finances. That is why achieving financial balance is essential for a stress-free and fulfilling life.
Imagine you have a well-paying remote job and are passionate about exploring new destinations and experiencing different cultures. You often take solo backpack trips that last more than 2 weeks to enjoy the present to the fullest, but forget to pay much attention to saving for your future.
Once your company goes through a round of layoffs and you unexpectedly lose your job, you find yourself without a steady income. In this example, losing your job unexpectedly after enjoying your passion for travel without saving for the future can leave you stressed about your financial status.
If you had financial balance and saved a portion of your income while enjoying your passion for travelling, you would have an emergency fund that would cover your living expenses, and job loss wouldn’t have caused you as much problems.
4. Create a realistic budget
A realistic budget serves as a financial roadmap in allocating your income effectively. It ensures that you can enjoy life in the present while saving for the future, and helps you make informed financial decisions that align with your goals and values.
People who have a steady income but don’t keep track of their spending will often find themselves running out of money before the end of the month and suffer from financial stress. Don’t end up like them; make sure that you regularly have a realistic budget.
One way to do this is to list all your sources of income, including salary and any additional income streams. You can also track expenses by categorising them into essentials (rent, utilities, groceries, transportation) and discretionary spending (dining out, entertainment, hobbies).
5. Leverage licenced money lenders
Licensed money lenders offer financial products and services that can provide assistance and flexibility when used responsibly. Leveraging licensed money lenders can be beneficial in difficult situations.
Let’s say you are a freelancer with irregular income, and one day in a month you face temporary cash flow issues due to delayed payments from clients. During months when you experience temporary cash flow gaps, you use short-term loans from a licensed money lender to bridge the financial shortfall. Loans from a licensed money lender allow you to cover your essential expenses and maintain your financial stability.
Here’s another example: Jenny has accumulated credit card debt with high interest rates due to previous financial difficulties. The high monthly payments are causing financial stress. Jenny then explores debt consolidation options with a licensed money lender. She consolidates her high-interest credit card debt into a single, lower-interest loan that can reduce her monthly payments and save on interest costs.
These instances serve as our reminder of the importance of loan management, whether you are a freelancer or with short-term cash flow concerns or someone looking for debt consolidation to reduce financial stress. By using services from a licensed money lender, you can navigate unexpected financial obstacles without sacrificing your ability to enjoy life and save for the future.
At the same time, make sure you can comfortably repay the loans you take out. Being responsible and repaying in a timely manner are essential to preserving your creditworthiness and your financial stability.
Find your financial equilibrium between enjoying and saving
Each individual’s path to financial balance will be unique. This may require some trial and error to be encountered. However, with the right strategy and the support of a licensed money lender in Singapore, you can find the perfect balance between enjoying the present and saving for a brighter tomorrow.