How to Set Financial Goals at Any Income Level

[Music] well hey you guys do you ever feel confused about the goals that you should be working towards financially or maybe having money goals has never even crossed your mind well either way we all know that the internet is full of hot takes and random advice and it's tough to know who to trust after over a decade in the personal finance industry I can confidently say that I've seen majority of people win using the same tried and true Financial advice so no matter your income level debt level marital status savings progress these steps work for everyone so today I'm walking you through the proven plan so that you can figure out exactly where to start and stick around till the end because I'll share my number one non-negotiable money goal that everyone should be working towards no matter their status so first let me just address the elephant in the room is it really that big of a deal that we should should always be working towards a financial goal I'm going to say in my opinion yes I think that there is so much power in working towards something so money aside just the integrity and the strength of character that you build when you push yourself and lean into discomfort is priceless and from a financial standpoint there is so much data out there that proves being intentional with your money no matter what level you're on financially is the secret to gaining momentum in your wealth building Journey so again you guys being intentional with your money it is so so key now there will be Seasons that you're more intense some Seasons not but always having that forward progress I think is so important and so like I said there are seven steps we call them the ramsy baby steps that allow you to take full control over your money you're Building Wealth goals achieving Financial Peace all of it so these are steps that actually my dad Dave Ramsey created and realizing that walking people through not just a set of principles CU principles are important but actual steps where you can see progress is really really key to winning with money cuz so much of money is behavior change and when you know that you're doing something and checking something off the list of like I did step one I did step two there's something in us that keeps us moving forward in that now let's go through those steps in order so that you can figure out exactly where you fall so step one is to save a $1,000 emergency fund so again starter emergency fund this is not your Forever emergency fund but it's to get you started now some people complain that $1,000 isn't enough and at times it's not so that means you will have to pause your other financial goals at times when you're paying off debt especially to save up more money to bump up that emergency fund if you need it but that's what's key is that should kind of drive you to be paying off debt because that's step number two but if you try to pay off debt without an emergency fund then you'll end up going back in debt if something happens and then also some people want a bigger emergency fund and it takes takes you longer to be building up cash for an emergency fund while you're still paying out all this debt and all this interest so it's easier just to get a quick start on debt and free up that income because that's where you're going to see progress so again starter emergency fund Step One is $11,000 step two is paying off all of your debt at your mortgage so this is going to include student loans credit card debt car payments personal loans anything that is revolved around debt except for your mortgage is in this process so you're list out all of your debt smallest to largest regardless of the interest rate pay minimum payments on everything and attack the smallest one First Once that's paid off you're going to be able to take the payments that you're paying on that roll it over to the second smallest debt so it keeps freeing up again these payments and you're able to build momentum and it creates a Snowball Effect okay once that is all done then you can move on to step three and you're going to bump up that starter emergency fund to 3 to 6 months of expenses and you can do this in a high yield savings account but the idea here is you don't want to invest this account you want to be able to get to it if you need it so if a job loss happens medical emergency you have a lot of money saved in the bank just for emergencies okay this is I think a big accomplishment once you get past baby step three you are completely debt-free but your house and you have money saved in the bank already that is a massive Financial Milestone that I think you really do feel in so much of your life you feel so much peace and again it is so necessary to keep going right we don't want to slow down but in those three steps you guys it is full intensity full intensity and then once you complete those three steps the next steps again we say you can take your foot off the gas a little bit and it's more okay we're still going to work towards some things but you don't have to be that intense so step four is to save 15% of your income into retirement so there's different ways you can do this but always remember this match beats WTH beats traditional so let's say you have 15% of your income and your company matches 5% you'll take part of that 15% 5% of it put into your 401k that means you have 10% left then I would go and fund a Roth IRA if you Max it out with 10% that's left and you have 2% left then go back to your 401k and you can fund that but those are two great options a 401k or a 403b and a Roth IRA so be looking into those because again I think it's key and if you want to check out our investment calculator at ramsy solutions.com Plus some numbers and just see what compound interest does it's a beautiful thing all right step five is to sa for your kids college and so if you have kids again this is something that you can start doing and working towards because so many students have to take out student loans and if you're a parent that is a gift it is not a requirement but a gift to be able to help your kids when it comes to college so putting money in a529 account I think is great or an Esa an educational savings account but you can sit down with a smart Vestor Pro when it comes to your retirement and kidss college and really map it out and so again being able to set your kids up I think is such a gift when it comes to their education all right step six is paying the house off early so what you're going to see is you're going to be doing retirement kids college and then anything else you have extra just be throwing at the house so you'll do four five and six at the same time and this is one of those things that man you just keep moving at it but when you're paying off your house and you pay off your house early at step 6 it is one of the most underrated things that you can do to increase your net worth and find a lot of pieace and on average we have found that people working the baby steps pay off their homes in just over 11 years so if you have completed all five steps and usually that takes around 2 3 four years to do the rest of it people are paying off their houses so could you imagine not having a mortgage for 30 years but for 7 8 9 10 11 years it's amazing absolutely amazing so being able to take advantage of that paying your house off it's an incredible thing and then once that's done all that's left is baby step seven to build wealth and give so giving is part of your entire Financial Journey regardless of where you are I always say give a little until you can give a lot but at baby step seven that's when you get to increase and you get to be extremely generous because all you're doing is funding Investments and enjoying life and giving money away and that's what you have left to to do and it's just wonderful so no matter how many people tell you on the internet that your financial goals are dependent on your age on your income your geographic location the truth is it really has to start with you deciding to make progress now do those things factor in absolutely but this idea that you have the ability to take control of your money is huge so use the baby steps you guys it is a proven plan to be able to get control of your money get out of debt save for the future and all of it so if you have not been budgeting budgeting is going to help you in this process make sure to check out every dollar I'll leave a link down below because this is really the whole plan you guys wrapped up in one video but it's easier said than done I can do this in a you know a 7 minute video but you're the one that actually has to make the progress but you can do it we see people every single day that are deciding I'm going to take control of my money cuz that's what I believe is so important and that you can do it so remember do take control of your money and create a life you love

Channel: Rachel Cruze

Views: 20,594

Keywords: the rachel cruze show, the rachel cruze show youtube, money, budget, how to save money, budgeting, personal finance, rachel cruze, save money, how to budget, debt, saving money, save, how to make money, ramsey, finance, how to get out of debt, debt free, How to Set Financial Goals at Any Income Level

Id: 9q-UTjlP3hI

Length: 8min 36sec (516 seconds)

Published: Fri Apr 26 2024