Ten years may seem like a long time; however, if you’ve noticed how fast the 2010s went by, then you’d know that 10 year goals aren't too far off at all.
Your plan should be based off of your personal financial goals, the life you envision living, and the moments you want to experience. Each goal should be segmented into short-term goals that you can assess during your journey in reaching that larger goal. This check-in should be at least every six months to make sure you're staying on track and, if necessary, make the right steps to make adjustments.
Here are some long-term goals to think about for the next 10 years:
Building An Emergency Fund
The standard emergency fund for unforeseen circumstances should cover at least 3 to 6 months of expenses. A more strict fund includes your monthly expenses devoid of outings, shopping and entertainment.
However, if you want to be more prepared, then challenge yourself to grow a fund that has enough to keep up with these additional expenses and that can survive a longer period of time.
This fund is critical to keeping your head above water when unforeseen circumstances occur. This could be a great first goal to tackle in your 10 year plan, to give you a safety net while you tackle other goals.
Besides growing in your primary income role, having multiple streams of income may be necessary to improve your financial situation. One of the best ways to increase your income is through passive income, or income earned without being actively involved. While it does take effort to begin sources of passive income such as rental properties and online businesses, passive income shouldn’t take much effort after it is established.
Make plans to develop and incorporate passive income into your income stream if you need to supplement your primary source of income.
Have trips, gadgets, and other expenses that may increase your quality of life? Plan for your goals by prioritizing and saving for each.
Create a budget for yourself that allows you to live within your means but still enjoy what you do have. This may take some refining along the way, but knowing what you value can go a long way in helping you make the best financial decisions for yourself.
Paying Off DebtCome up with a plan utilizing the Snowball or Avalanche method to tackle your current debt. Your priority should be on any debt that has high interest rates. This type of debt can be crippling and can have you stuck in a cycle of just paying off your minimum.
Whether it’s your credit card, student loans, car, or mortgage, making a dent in your debt is critical for your financial freedom. Using a savings app could help you tuck away spare change and funds over time to help get you out of the negative.
Preparing for Retirement
You can accrue a hefty amount of retirement savings within ten years. The hardest part is starting.
Having enough for retirement is based on the lifestyle you desire during your retirement. Most people plan to spend $50K to $100K per year in retirement, so the suggested retirement is usually at least 10 to 12 times your annual income. However, if you foresee yourself going on various trips and splurging during your retirement, you should increase your retirement fund to cover the additional expenses.
Although retirement seems like a long way off, or just around the corner for some, every deposit into a retirement fund will benefit your future self.
Investing for Growth
Saving is necessary for financial stability, but investing is crucial to experiencing financial growth.
If you haven't gotten involved in investing, then these next years are the perfect opportunity for you to start. Maybe dip your toes in with fractional shares, and as you learn more about investing, you’ll be more comfortable with market risk.
And if you don’t want to go it alone, a solid financial advisor could help point you in the best direction for you and your particular circumstance.
How To Start
That’s a lot of goals! And quite a bit to juggle.
The Vimvest app can help you create your long-term and short-term goals, help you invest, and automate your saving deposits so you can set your savings on auto pilot.
Turn your 10 year plan into concrete next steps by using the Vimvest app.