If you don’t have clear short-term, medium-term, and long-term goals, you’ll likely spend more and fall into the vicious cycle of debt, particularly credit card debt, which is undoubtedly the most expensive and unfavorable option for you.

No one can predict everything or prepare for everything, but each of us should have set goals.

Financial planning from year to year will help you and teach you how to be in a better financial situation. Short-term goals are the beginning and the foundation you need to have.

You need an emergency fund and should aim to eliminate credit card debt; paying expensive interest should not be an option for you.

Track your monthly expenses and see how much and what you spend your monthly budget on.

Create an emergency fund, starting with 500-1000 EUR, ideally at least 3 months’ worth of your budget. Try to reduce liabilities. Anything you pay for but don’t use is a pure loss for you and your monthly or annual budget.

Think about assets and how to redirect funds into something that will benefit you financially.

Next is the repayment and closure of credit card debt; paying the bank interest, especially interest rates of 15-20% or more, should be a priority, as not resolving it can cost you tens or hundreds of EUR monthly. If you have old debt that has come due, also consider closing it because the legal default interest rate, which is 7.50%, also accumulates and pressures your finances.

If you have more such debt, try to close it with a loan at a lower interest rate than the credit card interest rate and legal default interest rate.

Once you’ve done all this, focus on medium-term goals. Focus on setting aside money for life insurance, subsidized savings funds; inquire with financial experts, and explore options for obtaining favorable policies.

Consider funds, passive incomes, real estate investment.

Your long-term financial goal should be how you will live in your old age. Ideally, you should invest 10-15% of your monthly income. Saving is not an option because annual inflation is so high that your purchasing power and the value of money decrease every year.

Investing in assets that will yield higher returns is what you need to achieve your long-term goal and financial freedom.

Time is the most valuable resource we have, so it’s essential to start right away. Determine how, how much, and the timeframe.

Each year will be different; some will be more successful, some less, but in the long run, you will achieve your goal and secure your financial freedom.