How to Overcome Obstacles and Achieve Your Financial Goals
Saving and managing money lasts a lifetime and can go a long way in helping you achieve financial success. But even the best-laid financial plans can run into obstacles that force you to pivot in order to stay on track to achieve your goals.
A recent study by WSFS Bank assessed the financial goals, confidence, and access of people 18 and older, and found that 67% of people in the Greater Philadelphia and Delaware area are confident they will achieve their financial goals. However, obstacles such as inflation and bad credit remained a concern for many regional consumers.
Here are tips to help you overcome common financial hurdles and pave the way to achieving your goals.
Dealing with inflation
Inflation has been a hot issue lately, with many consumers feeling the pressure of rising prices on everything from groceries to cars and more. The WSFS survey found that 44% of regional respondents are not confident they can keep pace with the impact of inflation on goods and services, highlighting the challenges consumers currently face when managing their money .
The impacts of inflation can also get in the way of your broader financial goals, such as building up an emergency fund for you and your family, a priority goal for more than half of people in the region (54%).
Although inflation can make it harder to save, building that rainy day fund is still essential to protect yourself from the changing economic and social influences around us. Consider opening a money market or higher-interest account for your savings, make sure your investments are well-diversified, look for bargains, and regularly re-evaluate your budget to cut unnecessary spending.
Improve your credit
Another major goal identified by the WSFS survey was the need to improve credit ratings, with 42% in the region citing this goal and 84% saying they are confident they can achieve it.
Establishing and maintaining a solid credit score, usually above 700, can be essential to achieving your financial goals, and is particularly important when it comes to borrowing, as it can affect rate offers. for your mortgage, loans and more.
If you find that your score still needs improvement, start by making sure you understand the basics of what a credit score is and what impacts it, such as payment history, credit usage, and combination.
Once you’ve mastered the basics, take steps to improve your score by paying off loans and credit cards with the highest interest rates and try to get your debt to credit ratio below 30%. to avoid having a negative impact on your score. Periodically checking your credit report with the major credit bureaus (Equifax, Experian, and TransUnion) can also help identify inaccuracies or even fraudulent items that could lower your score.
Save for big purchases
Among other common goals uncovered in the survey, 36% cited the need to save for a major purchase, and 29% said their goal was to buy a house or apartment. Three-quarters (75%) of regional respondents were confident they could save for a major purchase, while 63% were confident they would be able to buy a house or apartment.
Saving for those big purchases takes time and patience, especially in times of inflation. Start by identifying your goal and the cost associated with it, then work your way up from there to build a roadmap and budget for achieving it.
Find a budgeting method that works for you, for example, the 50/20/30 rule, which allocates 50% of take-home pay to necessities like food and rent, 20% to savings/debt reduction, and 30% to lifestyle choices. There is no single method that works for budgeting, but the most important thing is to make sure there is no deficit and to regularly review your budget to look for additional savings.
If you need more help building your roadmap to success, consider speaking to your banker, who can offer additional guidance and help you identify products and services that will help you succeed.
Vernita Dorsey is senior vice president, director of community strategy at WSFS Bank. She has over 38 years of experience as a community banker and has actively served her community throughout her career.