Step 3 To Pay Off Debt: What are Your Financial Goals?

The next step to paying off debt is to figure out exactly what your goals are. You may not have any debt but do not know how to save money. It is important to have a specific purpose for your money. Examples are:

• New car
• Education
• Pay off loan
• Retirement
• Vacation
• Emergency fund
• Increase general savings

Most of us will have multiple goals. If that is the case, all you have to do is prioritize them. Obviously it is easier to concentrate on short-term goals, but if one of your goals is more long-term, but is the most important to you, save for that one first. Write out all your goals by priority.

One you are done prioritizing your goals, you have to set (realistic) time-lines to pay off or save up to reach them. The last step is to do the math! Now you are one step closer to paying off your debt or saving more money. This step makes your goals more tangible and it will help you keep them.