Everyone has financial aspirations that matter deeply to them. These could range from owning a luxurious home in a bustling city to fulfilling a dream of owning a homestead. Attaining these financial goals, however, is often more challenging than we think, with prevalent roadblocks including things like debt or mismanaged finances.
Outlined below are some common obstacles that might be hindering you from realizing your financial goals.
1. UNMANAGED EXPENDITURE
Many Americans grapple with overspending. Statistics reveal that approximately half of American residents spend more than their earnings. This habit hampers any efforts towards debt repayment or saving, blocking progress towards financial goals.
Credit cards, which most Americans significantly depend on, often fuel this overspending. Many people are tempted to overspend because they mistakenly regard credit as free money.
2. RESIDENTIAL LOCATION
The city you reside in directly influences the pace at which you can achieve your financial goals. For instance, an annual income of $65k will stretch further in a state like Kansas compared to a pricey city like San Francisco.
Living in expensive cities undoubtedly strains your finances, but prudent budgeting may help alleviate this issue. Regularly monitoring your expenditure can lighten the financial load.
Related: 5 Ways City Living is Costing You (And How to Beat Them!)
3. FAILURE TO PRIORITIZE FINANCES
You must set and prioritize your financial goals to steadily grow your wealth. Prioritizing leads to financial decisions that focus on saving more, earning more, and paying off debt. You might have to make certain sacrifices, like eating out less frequently, to ensure you save sufficiently.
If you’re committed to your financial goals, they should wave their flag in your budget and money management strategy. This year, I have set numerous financial goals, and I’m keen on maintaining a rigid budget to ensure I attain most of them. When we spend leisurely on dinners, trips, and other indulgences rather than boosting our savings or making down payments on a house, it’s a sign of poor prioritization.
5 Obstacles Preventing You from Achieving Your Financial Goals.
4. INSUFFICIENT EARNINGS
No matter how skilled you are at saving and prioritizing, your progress will eventually stall on a low income. If your annual earnings hover around $25k and your expenses consistently surpass $20k, you’ll consistently fall short of achieving your financial goals. I’ve been there, too. When I began my journey towards financial stability, I realized just how little frugality could achieve with low earnings.
Instead of constantly pinching pennies, I found side gigs that allowed me to work from home, considerably boosting my earnings by an extra $1,000 to $1,500 monthly. If you’re in a similar situation, consider options for augmenting your income or drastically reducing expenditure. You could get a new job, ask for a raise or more working hours at your current job, or start a side gig.
5. COMPARISON TRAP
Believe it or not, ‘comparison syndrome’ is a real obstacle to financial success. You may make excellent progress in your financial plan until life blindsides you. Worse, you might start comparing your progress to others’.
Many of us fall into this trap. We compare ourselves with others, and it either sows seeds of inadequacy or prompts us to match their spending patterns. Remember, your financial goals are unique to you. Stay determined and avoid focusing on others. Such distractions can only ruin your progress. Hold firm to your course—it will pay off in the end.
IN SUMMARY
While we all have financial goals, achieving them might be hard if you run into any of these impediments. The key is to anticipate these obstacles at the onset and formulate an overcoming strategy.
Source: SmartAsset.com
