What to do if your financial goals are bigger than your income?

Many of us set financial goals every year, but only a few of us manage to accomplish them. According to the experts, one should always set realistic goals which would match the income. But some of the goals need additional efforts because our dreams can be unlimited, but income has limits.

With multiple expenses, our monthly income already struggles to fulfill all the needs. However, that does not mean we cannot make financial goals. Determining intentions and the right approach can make things simpler, and you can achieve even the big financial goals.

With the right approach, you can manage any financial situation

Yes, that is true. Financial challenges are part of life. If you know how to manage money better, you can handle any situation. Imagine you have a poor credit score and need funds to buy a car. If you embrace self-discipline and start paying the bills and debts at the right time, it is possible. There are affordable deals of car finance with bad credit available in the market.

Generally, we set goals to manage our money and become financially stable. But in most cases, people find conflict between income and financial goals. They plan extraordinary financial goals than their income. There is no wrong in looking at the big picture. But then you also need to work accordingly to achieve that. If you are of the same mindset and wish to fill this gap, then here is the guide.

Set Short term goals are not destined to break

Setting short-term goals can always boost your morale to save for the big ones. We set them with excitement but very soon break them. Short-term goals are easy to achieve and take considerably lesser time. These goals certainly cannot make someone a millionaire but can help to achieve the specific thing.

One can easily build up a good amount of savings or corpus by achieving short-term goals. First, start writing all of the short-term goals for which you wish to save and prioritize them. Achieving each of the goals will give a boost to achieve next and eventually the bigger one.

Budgeting should not remain on paper only

What is the use of mind-boggling on the monthly budget if you will break your own rules? If one has a limited source of income but wishes to have a full maximum amount towards the financial goals, then budgeting is important. Creating a budget helps to spend the money in the right places and keep track of it. You can specify the fixed monthly expenses, debt repayments, and other miscellaneous things for which you need to spend money every month.

After allocating a certain part of income for expenses, make sure to move one part of earning to the savings. Now here, the % or the amount depends upon the goal. According to the experts, one should always keep aside 20% of his income as savings every month. Writing down these things on paper can help to give a clear picture. Various apps can also help to create a budget and manage the money.

Build an emergency fund should be in culture

Yes, it is not only a need but a culture or trend of financially successful people. Creating an emergency fund gives a surety that one is financially backed up during the bad times. Most people tend to build the emergency fund to pay for unexpected expenses. Having an emergency fund can let you focus on saving towards other financial goals, even if there is a case of unemployment for a certain time. It is easy to build up an emergency fund.

According to the experts, one needs to save at least 6 months of expenses as an emergency fund. You can open separate savings account to save this amount. One can also move that money to various funds to grow the money and earn a good amount of interest. The process gets easy through the auto debut facility, wherein a certain amount gets debited every month on a particular date.

Pay off the credit card dues actually

Most of us get advice from our friends or relatives for saving money. One of such common advice is to avoid unnecessary expenses. Credit card interest is considered a huge expense that most consumers pay. Credit cards generally incur a lot of interest, and most consumers end up paying huge amounts every time. If you wish to contribute a higher amount towards the financial goal, then make sure to cut down on such expenses.

It is important to clear off the credit card dues as early as possible. Apart from credit card make sure to clear off other debts as well that incurs higher interest. Most of the experts advise making a list of the debts according to the higher rate of interest. They advise paying the maximum amount to the higher interest debit or credit cards. 

Get an insurance

You certainly do not wish the future of a family to get affected due to your goals. Hence it is important to secure by getting insurance. Getting term life insurance can meet most of your needs, and it becomes easy to focus on other financial goals.

Most of the companies do provide disability insurance that can replace the income if the insurer gets injured or ill. Hence getting enrolled in such insurance can always save you from trouble. Apart from these regular insurances, it is important to get health insurance as no one likes to pay huge hospital bills from their pocket.

Save for your dreams

For some people, their dreams and real financial goals are different. Saving for the house or education is something that one cannot skip. But apart from these, it is important to save for your dreams as well. It could be a tour of an island or a car.

By this, one does not feel overwhelmed only by the formal financial goals. Pushing yourself to save for the dreams can help to boost morale and saving abilities. One can set aside some percentage of the income every month or year every month to contribute towards the dreams.

Nest egg for retirement is must

Most people tend to get worried about retirement right from their 30s. It always feels like a burden to them, and hence they cannot focus on other aspects of the finances. Therefore, one can start saving for retirement by keeping aside a certain amount for it every month or a year.

Make a note of expected annual expenses that can occur during retirement. After this, you can consult with any finance expert to get the right plan or scheme for investment. There are various online retirement calculators available on the internet that can give the required amount of savings.


The planning for filling the gap between the gap and financial goals may not be the same for everyone. But these are some of the basic steps that one can take to get started. Money management with the right attitude and patience always gives success. 

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