The end of the year is here, and if you can find time in between last-minute shopping and spiked eggnog, then take an hour or so to reflect back on how you spent your money this past year. Creating yearly financial goals is a great habit to form when building a healthy financial future. Even if you don’t reach all of your goals, if you set them too high, or set them too low, they serve as a motivational tool throughout the year to strive toward something. If you don’t know where to start when it comes to making financial goals, start with what you spend and how much you spend on it.
Print out all of your checking account statements for the past year
How much were you spending on clothing? How much did you spend on eating out at expensive restaurants? How much did you spend on eating out for lunch? How much did you spend on the house or your kids? Get a ball park figure on all of these types of questions.
Now evaluate the amounts
When you find out that you spent $300 a month on eating out for lunch, a great goal for 2010 is to start bringing your lunch with you to work 10 times a month. When you find out that you were putting clothing purchases on a credit card and not paying off the balance at the end of the month, a great goal for 2010 is to start a clothing budget fund and only pay cash for clothing.
Write Your Goals Down Somewhere
Don’t make mental goals. Write them down so you can reference them at the end of 2010. Then, you’ll be able to compare your results and see what kind of progress you made.
Make Quantifiable Goals
Don’t just make a goal that you will decrease your spending on eating out. Make a specific goal like, “I will decrease my spending on eating out from $300 a month to $150 a month.”
I know that goal setting sounds so nice, but when it comes down to it you rarely follow through with them or follow up on them. Goal setting is such a mythical topic that we all talk about, but we never do it. The way to avoid this is by keeping the goals simple, make them attainable, and post them somewhere visible like your refrigerator door or on your work desk.