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How To Achieve Your Financial Goals When They Feel Out of Reach – GOBankingRates

Money / Financial Planning

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Money / Financial Planning

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Although much has been made about how the American economy recovered from the depths of the coronavirus pandemic and how low unemployment is, the truth is that things are still tough for many Americans. Some reports claim that only 39% of Americans could comfortably handle an unexpected $1,000 expense, which implies that other financial goals remain out of reach as well.

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While it’s hard to conjure extra income out of thin air, there are concrete steps you can take to help move you forward toward each of your financial goals, even if it means setting reduced expectations. The bottom line is that the earlier you start planning for what you want to achieve, the more likely you are to do it.

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Here’s a list of some common financial goals along with specific steps you can undertake to help reach them.

Getting Out of Credit Card Debt

When it comes to common financial goals, getting out of credit card debt is right near the top of the list for most Americans — as it should be. Having credit card debt is likely the top cause of why Americans can’t reach their other financial goals. With oftentimes high double-digit interest rates, credit card debt can rapidly snowball out of control until you’re simply paying off the interest every month without reducing the actual debt. This is why it’s paramount to attack credit card debt aggressively.

Typically, two methods are cited as the best ways to pay off credit card debt: the debt snowball and the debt avalanche. With the debt snowball, you pay off your smallest credit card balance first, then tackle the next largest after that and so on. With the debt avalanche, you’ll pay off the highest-interest debt first, regardless of its size.

Both methods have pros and cons, but as long as you create a plan and stick to it, you’ll make progress against your credit card debt. To give you a head start, try to boost your savings even by an extra $50 or $100 per month and put it towards your credit card debt. You could also temporarily divert your other savings, such as your retirement plan contributions, to help prevent your credit card debt from spiraling out of control.

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Source: https://www.gobankingrates.com/money/financial-planning/how-to-achieve-financial-goals-when-they-feel-out-of-reach/

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