Ever look at your bank statements, and you don’t like the numbers, and you get the sinking feeling you’re behind on your long-term financial goals? 

You realize you probably should’ve done more when you were younger to save for retirement, but now it’s too late to go back and undo those mistakes. 

So, you run the numbers and realize you’ve got a lot of catching up to do: whether you just need to catch up on the last couple years or the last decade or more, it feels hopeless. Reaching those financial numbers so you can feel comfortable again feels out of reach, and you almost feel like it’d be easier to give up. 

Don’t!!

I know catching up on your long-term financial goals when you feel behind feels like the worst uphill battle, but it CAN be done. 

Here are six steps to take to get there:

1. Determine Your Goal Amount & Ideal Retirement Date

If you don’t already know how much you need to retire (or when you’d like to retire), now is the time to figure it out. The rule of thumb for our clients is to have their net worth equal 10x their annual income before they retire. This lets them have a solid, antifragile retirement plan and allows them to live the life they want in retirement.

If you need help figuring out what these numbers should be, contact a financial advisor.

2. Take Stock of Your Assets

Before you jump to conclusions about how hard your retirement savings will be, take stock of all your assets and determine what they’re worth. 

These assets include your retirement savings accounts like 401ks and Roth IRAs, but can also include things like stock options, property, and other investments. 

For example, if you have stock options in a company moving towards IPO, that’s usually no small amount of money. While you may not cash out on 100% of your stock options when the IPO happens, you may be sitting on a value worth 2x to 3x your annual income that you can exercise, sell, and add to your retirement savings over time. When you add this to your calculations, your long-term financial goals become a lot more doable. 

Also: make sure you gather together ALL of your past IRAs and 401ks. To make it easier, work with a financial advisor to consolidate and make a plan for how you’ll utilize them in your overall portfolio.

3. Count Your Liabilities

Assets are only one side of the equation when figuring out your net worth. To keep sustainable financial responsibility, we don’t want to ignore the debts you owe. 

Not all liabilities are necessarily bad: home debt can mean you won’t have to pay rent in retirement, and student loan debt can mean you have a career that pays you more than if you never incurred that debt in the first place. 

But if it’s there, it needs to be accounted for and taken care of. 

What is the total amount of your liabilities? 

Are there any liabilities (like consumer debt) that you’d like to pay off ASAP?

4. Calculate Your Cash Flow

One you’ve got a grip on your goals and your overall net worth, it’s time to figure out how to allocate your cash flow. 

How much money do you have coming in? And on what basis? 

A twice-monthly paycheck counts towards your cash flow, but so does the rental income you get from your extra AirBNB room. Likewise, your once-per-month photography side hustle job also counts. 

Identify all your sources of incoming cash, and do your best to calendar them out on a month-by-month basis.

5. Prioritize Your Spending

It can be tempting to want to shovel as much money as possible towards your retirement accounts, especially after you realize you’re behind. But that’s not always the most sustainable way to do things.

First of all, account for your necessary, regular monthly spending. 

How much do you spend on living expenses each month? How much of a financial cushion do you need to give yourself on top of that? 

After that, then look at how much cash flow you have left. 

With that amount, prioritize which retirement accounts to invest in first, and which types of investments you’ll buy. For example, you might choose your 401(k) match as your priority, then max out your Roth IRA, and then move on to something else. 

Work with your financial planner to come up with the most sound, financially-rewarding plan for your situation.

6. Create a Budget With an End Date

With your priorities in order, decide how much to contribute to each account (and each investment type) per month. Set goals that are achievable with your cash flow, knowing that you can always contribute more if you get a raise or have extra money left over. 

When you have this budget set, you’ll be able to calculate an end date for when you’ll officially be back on track and on top of your game.

Get On Top of Your Game & Achieve Your Long-Term Financial Goals

Once you know your predicted end date for getting back on top of your game, you’ll be able to breathe easy again. 

You’ll be able to look at your financial statements and feel confident about your future, instead of an anxious dread and worry that you’ll be poor and miserly in your old age. 

One of the best steps you can take right now is to work with a financial advisor to create a solid plan to get you on track towards retirement. We won’t judge you for being behind, and with our financial planning experience, we may even be able to put together a plan that’ll help you accelerate your long-term financial goals that’ll put you years ahead of schedule. 

Schedule a time to talk with us today.