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7 steps to reaching financial goals more easily

Woman using financial checklist to reach her personal finance goals
June 20, 2016

By Pam Leibfried

Being responsible and working on your financial goals can feel like such a pain at times. Spending money on a vacation would be so much more fun! 

But your future self will thank you for your smart money moves. Plus, we can help make it less painful by going step by step.

Feeling energized? Let’s go!

Reach Your Smart Financial Goals

1. Build your emergency fund

First, know you aren’t alone if you find saving money difficult. According to a 2016 Bankrate study, just 37% of Americans have enough savings to pay for a $500 or $1,000 emergency. 

We know it can be hard to see a big chunk of change sitting in your savings account and resist the urge to spend it. But, eventually, most people will go through one of life’s little emergencies (like a broken A/C or dead washing machine), or a really big, scary one (like unemployment or major illness). Wouldn’t it be better to be prepared?

One of the easiest ways to build up your rainy day fund is to “pay yourself first.” No matter how little or large your paycheck, be sure to set aside part of it for your savings. Do this with every paycheck and feel proud of yourself, no matter the amount. 
Ideally, you can set aside the funds via direct deposit into a separate emergency savings account, assuming your employer lets you split your paycheck. Alternatively, you can create an automated funds transfer from within your checking or savings account. If your income is less predictable, you can also do it manually each time a new paycheck comes in.

2. Stick to a budget 

Budgets may seem boring, but they’re a vital tool to achieving your monthly and long-term financial goals. To stay on track, begin tracking your expenses to see how your bank account looks after each month. From there, set aside money for each area of expense including: 

  • Mortgage/Rent
  • Groceries
  • Utilities 
  • Car Loan, Student Loan, Credit Card Debt (as applicable)
  • Eating Out
  • Entertainment
  • Shopping
  • Travel or anything big you’re saving for

Assigning specific amounts to your budget line items means you won’t end up running short. Need more inspiration? Studies show that people who have a budget are more likely to be able to meet their savings goals than people with no budget.

3. Get insurance

Having insurance protects you and your budget. Whether it’s disability insurance should you become unable to work, GAP insurance should your car get unexpectedly totaled or life insurance for your family should the very worst happen—insurance makes difficult times easier. 

Many people go into debt because they aren’t prepared to cover additional, unexpected costs. Don’t be that person. Instead, trust that the premiums are worth it.

4. Review your bills every month

Reaching your financial goals is easier if you know where you money is going. If you've set up automated bill payments, it’s beneficial to take a monthly look at your bills to assess your spending. Plus, you can then ensure you’re being charged the correct amounts and that your subscription prices haven’t increased without your knowledge. 

5. Live within your means

It sounds sort of clichéd, but spending less than you earn and setting a realistic budget is an important factor in reaching your financial goals– and it lessens the likelihood that you'll ever go into debt. If you always spend exactly what you earn, or more than you earn, you'll never get ahead or save enough for an emergency. Living within your means is a major step in becoming more financially stable and secure. If you’re feeling strapped, consider adding a side hustle or two to your income.

6. Know your net worth

Do you know how much you’re really worth? Most people don’t! Yet calculating and regularly updating your net worth—the value of all of your assets minus the amount of your debts—keeps you in tune with your money and progress toward reaching your money goals. Your net worth is a great snapshot of your financial picture in one number, and can help you better understand your big-picture financial situation. 

How can you easily calculate your net worth? Simple:

7. There’s an app for that! 

A personal financial management tool, or PFM, can help organize your finances and keep track of your spending. As a member of Alliant, you get free access to our PFM—the Alliant Money Management and Budgeting Tool—in Alliant Online Banking

Your Alliant accounts are automatically populated into the PFM tool, and you can automatically tag your transactions with your own custom expense categories to monitor your spending and set up a budget. You can even set up alerts to let you know when you get close to your budgeted limit in a specific category. 

Adding accounts from other financial institutions, your 401(k) or IRA, and the value of any assets you own (home, collectibles, car, etc.) lets you see a dashboard of all of your assets and liabilities, along with a running tally of your net worth. 

If you get into the habit of checking off these items from your financial checklist monthly, you’ll be well prepared to reach your financial goals, whatever they may be. Plus, you’ll feel confidently in control of your finances. Everything takes practice, so don’t get discouraged if you slip up sometimes. Foreign languages can’t be learned overnight and neither can personal finance management.