Setting yourself up for financial success and stability is one of the most important goals you have to achieve while in the US.
If you’re someone who’s looking for a new beginning by moving or is planning to take a higher degree in the US, setting your financial goals in the US is a main priority. When you establish your financial goals, it enables you to create a secure financial life where you can enjoy the country’s benefits. Understanding how to set up those goals can be challenging, but it’s never impossible. This article will help you by providing you with tips on how to set up your goals and achieve a financially stable future.
The Importance of Establishing Financial Goals
Moving to a new country can be an exciting feeling, but it also comes with its fair share of challenges, and the financial aspect is no exception. Setting up your financial goals can go a long way in reaching financial stability and success while in the US. These are just some of the reasons why it is important and how it can help you in navigating through it:
Provides a Sense of Direction and Purpose
Setting up your financial goals can give you a clear understanding of where you want to position yourself after a length of time. If your reason is you’re saving up for a big purchase, building an emergency fund, or paying off debts, having these goals will keep you motivated.
Building Financial Security
A big reason why you should set up your financial goals is it allows you to be secure for any plans or even unexpected events you might experience in the future. If something happens like an emergency or paying for medical bills, you can have peace of mind that you’ve planned for this one in the past.
Improves Your Financial Literacy
Building towards your financial goals involves learning about various financial terms and concepts. You’ll become more knowledgeable about budgeting, saving, investing, and credit card management. This will enable you to make informed decisions about your money. Fintech companies such as Adro can help you in establishing your financial status early on as you learn the many financial terms.
Your savings can go hand-in-hand with your learnings in financial literacy, where both go on an upward trajectory. The more money you establish as soon as possible, the more you learn about the intricacies of the US financial system as well.
Develops Long-term Planning
If you’re someone who’s planning to live in the US, financial goals are crucial for long-term planning. Whether it’s saving for your graduate studies, buying a home, or preparing for a married life, having clear goals ensures that you’re taking the necessary steps today to secure your future.
Improves Decision Making
With your financial goals specified, decision-making becomes a lot easier. Each financial decision you make will be guided by your overarching goals, leading to better outcomes and helping you stay on track. Plus, when you achieve financial goals, no matter how small, can significantly boost your confidence, allowing you to manage your finances better for larger objectives.
Identifying Your Financial Priorities
When you first step into the US, it is important to identify your financial goals and prioritize the most important ones. This is an effective tip to achieve your long-term objectives in life. Here’s some tips on how to do it:
Open Up an Account
Opening a new account is the first step in setting up your financial goals. This allows you to establish your financial standing the moment you arrive in the US, making it easier to set up your goals. If you’re looking for convenience, fintech companies such as Adro can assist you in seamlessly opening an account.
You can open your account using an app even if you still haven’t arrived in the US. The moment you arrive, you can immediately use your account, allowing you to start setting up your financial goals.
List Your Goals
Start by writing down all the financial goals you can think of, both big and small. List them down in a notebook or the notes app on your phone. These might include saving for emergencies, paying dues, buying an apartment, or saving for education. Seeing everything laid out can help you understand what you want to achieve in the future.
Categorize Your Goals by Time Frame
Once you finish making your list, categorize your goals into short-term, medium-term, and long-term. Short-term goals include building an emergency fund. Medium-term goals involve saving for a down payment on an apartment or funding your higher education. Long-term goals often include retirement savings or major life events like purchasing a home.
Prioritize Goals Based on Urgency and Importance
Keep in mind, not all goals are equally urgent or important. An emergency fund, for instance, is a higher priority over saving for a vacation. Rank your goals by understanding which ones need to be addressed first and which ones will have the most significant impact on your financial well-being.
Set Specific and Realistic Targets
For each goal you’ll be setting, set specific and realistic targets. Instead of saying, "I want to save money," specify how much you want to save and by when. For example, "I want to save $1,000 for an emergency fund in 6 months." This makes it easier to track your progress and stay motivated.
Properly Allocate Your Resources
Regularly check your income and expenses to see how much you can allocate towards each goal. Create a budget that helps you put money towards your goals while still covering your day-to-day expenses. Depending on the situation, it might involve cutting back on unimportant spending or finding other sources of income.
Setting Your Financial Goals the SMART Way
One of the best ways to ensure your goals are clear and achievable is using the SMART goal method. Let’s break it down in an easy-to-understand and insightful way:
Specific
Your goals should be clear and specific. Avoid being broad as much as possible. Instead of saying, "I want to save money," specify the amount and purpose. For example, "I want to save $5,000 so I can purchase a used car next year." This clarity helps you focus and makes it easier to plan.
Measurable
Your goals need to be measurable so you can easily track your progress. For instance, if your goal is to save $5,000 in a year, you can break it down into saving about $417 each month. Being measurable allows you to see how far you've come and how much further you need to go.
Achievable
Your goals should be realistic and attainable. It’s fine to be ambitious, but your goal should also be something you can reasonably achieve and is aligned with your current financial situation. Imagine if you’re earning $2,000 a month, aiming to save $1,500 each month might not be realistic. Instead, aim for a smaller, more manageable amount like $200 a month.
Relevant
Ensure your goals are relevant and still align with your other financial and life plans. Ask yourself why the goal is important to you and how it will help you achieve your long-term goals. For example, saving for a used car might be relevant if it’s important for your convenience and ease of travel, but if paying off debt is a higher priority, that might play a factor in helping you prioritize.
Time-bound
Set a definite deadline for your goals. A time frame helps create a sense of urgency and keeps you motivated. For example, instead of only saying, "I want to save and buy a used car." set a deadline like, "I want to save $5,000 for a used car by next December." This way, you can plan your savings and stay on track.
Putting it All Together
From the examples that we mentioned, let’s summarize it so we can clearly understand:
Your goal is to save $5,000 to purchase a used car next year.
- Specific: Save $5,000 for purchasing a used car.
- Measurable: Save about $417 each month.
- Achievable: Based on your budget, saving $417 each month is realistic.
- Relevant: The car is important for your convenience and ease of travel..
- Time-bound: Save $5,000 by next December.
Following the SMART method enables you to have a clear objective when setting your financial goals. Try practicing this as early as possible so you can set yourself up for success in no time at all.
To wrap everything up, setting your financial goals in the US for someone who’s planning to move is an important way to establish clear financial objectives. If you have your goals set, it motivates you to do the necessary things to achieve them. You also have to anticipate that it may be challenging at some point, such as an unexpected event, but it’s only a matter of adjusting and managing your finances.
