Be realistic while chalking out plan. While making a plan, do not be too ambitious. Be realistic, especially on the flexibility part.
How do you bring flexibility into your plan?
Well, the best thing you can do is make sure your plan is based on reality. Often, people establish savings goals that are simply outside the realm of what can easily be achieved.
For instance, a person who leads his/her life from pay-check to pay-check is not going to be debt-free overnight. Instead, look at what you can realistically save.
If you are setting a goal for debt freedom in five years, can you realistically come up with 1/60th of that amount every month? If your goal is not realistic in the short run, it would not be realistic in the long-term too.
Once you have your financial goal broken down into small achievable milestones, automate the entire plan. For instance, give a standing instructing to your bankers to transfer automatically a fixed amount to a separate account either on weekly or monthly basis. This will help you in two ways.
First, it locks you into a plan that moves you toward your financial goal without having to make active decisions along the way.
Second, it puts you in a position where you focus on dealing with how to lead life after making a provision for your goal— not trying to decide whether to make for it. Keep the funds out of reach.
Once when you commence the savings activity, it could be tempting to use that money for some other purposes. But there should be no way for you to access that money because impulsive decisions will prolong your financial goal. Instead of opening a separate savings account in the same bank where your main account is being operational, save your money in a different bank located remotely or even keep an account in other financial institutions such as a post office.
To conclude, follow the above steps which will help you to achieve your financial dream into a financial goal.
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