January 1st has come and gone, and those New Year’s resolutions you made are now a fading memory (admit it, the number on your scale probably hasn’t budged).
But the year’s not over yet, and it’s not too late to set new goals – and actually stick to them.
Here are 5 financial goals that everyone can achieve, as long as you have a plan. If you haven’t already, check out the money moves you should make at the beginning of each year. Those will all apply here as you get started on your renewed goals.
Top 5 Financial Goals
1. Get Out of Debt
Wouldn’t it be nice to not have to give your hard-earned money over to credit card companies or student loans every month? This is the number one financial goal for most Americans, but unfortunately most who make this resolution fail because they simply don’t have a plan.
How to Succeed:
Take stock of ALL of the debt you need to rid yourself of. If you would like to concentrate on credit cards and loans and leave the mortgage and car payments as is for now, include that in your planning. If you can not lay out a plan yourself, try utilizing an online tool like DebtGoal, which can account for how much interest you pay and will be much more exact than your own estimates.
If possible, try to set a solid time table for your debt reduction or elimination. With set payment amounts over a predetermined period of time, your chances of success increase exponentially.
2. Make and Utilize a Budget
A few years ago, I made a resolution to better budget my money. It was wildly successful until a monkey wrench got thrown into my finances in the form of a car accident that I was ill-prepared to foot the bill for. Things went downhill from there, and it took quite a while to recover from it. Since then, my modified budget is in place and seems to be working well.
Remember, a budget is a constant work in progress. Everyone’s financial situation changes constantly, and if your budget has the flexibility to survive plenty of variables, then you’ll set yourself up for success.
How to Succeed:
There are many different budgeting methods and programs that are easy to understand. For example, you can utilize the envelope budgeting system using a tool like Mvelopes, or you can connect your financial accounts to tools like Mint.com or You Need a Budget to better automate the process.
These are not one size fits all. Tinker with different programs until you find the one that works best for you. Once you set a budget for yourself, stick with it – as in, don’t buy plane tickets to Miami for summer vacation on a whim, if they’re not within your budget.
3. Save “X” Dollars
Imagine having a nest egg of $10,000, $20,000, or even $100,000 sitting in the bank. It would feel like a (very cushion-y) safety net and could help relieve the stress of living paycheck to paycheck.
How to Succeed:
Figure out how much you can afford to do without each month. For some, it may be as little as $10 a week, for others it may be $200 a week. But if you can’t find even $5 in your stretched budget, it may be time to take a look at what you’re spending your money on. Can you live without your daily venti caramel latte at Starbucks? Start making your own gourmet coffee recipes at home, and put that $24 per week toward your savings and emergency fund. If you’re hoping to save a certain amount by year’s end, a simple savings calculator will help you determine how much you need to stash away each month.
4. Stop Using Credit Cards
Maybe you are just too far in debt to realistically pay it off this year and you just want to rid yourself of the credit cards that have sucked the life out of you. Hey, it’s a start. But it is easier said than done.
How to Succeed:
Step one: Destroy your cards. You may think that you “need” them in case something happens, but you do not. If you are that worried about getting into a sticky situation, build an emergency account before you destroy your cards. But still get rid of them.
Step two: Refrain from using your credit line any further. You may realize that you still have the information on your statement and can very easily utilize the credit line, but you will only be digging yourself further into debt. If you truly believe credit cards are the only way you can make ends meet, you need to re-evaluate your budget and get rid of any purchases that aren’t necessary for survival (e.g. you cannot eat that Louis Vuitton purse, nor will it shelter you in a storm).
5. Buy a Big-Ticket Item
Perhaps your resolution is to buy yourself something big, like a new car, a house, or a business property for real estate investing. After all, splurging every once is a while is necessary to avoid frugal fatigue. However, like all of the above goals, this will not come without effort and discipline. For starters, make sure you’re getting what you want and that you do not bite off more than you can chew. You do not want a big purchase to end up damaging your finances over time.
How to Succeed:
Evaluate your monthly budget and decide how much you can afford as a payment each month. Then do not go over this amount during your negotiations. If the seller won’t come down, this isn’t the right car, house or property for you. Also, make sure you have someone with experience on your side. Buying a car? Take it to a reliable mechanic to check it out. Investing in real estate? Have a neutral party do a walk-through with you. Having just one trusted person on your side may be the difference between a complete nightmare and a smooth transaction that you will enjoy for years or decades to come.
Whatever your financial goals may be, the main path to success is creating a plan that will work, and sticking to it. Good luck!
What are your financial goals and how to you plan to meet them? Share your tricks, tips and success stories with us.
Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.