As you start looking forward to next year, it is ideal to have money goals you want to achieve during the early part of that year. This can be short-term goals you can aim for to help you strengthen your finances for the whole year. These mini-goals could also complement and help you get closer to your overall long-term goals.
This could prove to be a challenging goal as you try and end the year on a high note as well. It is not easy to get through the holidays without taking on any form of debt. You could be using your card to buy presents for family and friends, dipping into your savings to fly out to family, or using your emergency fund to host that party for the holidays.
These are questionable ways to get through the holiday and planning for these expenses need to be done way ahead of time. Doing so will help achieve your money goals at the start of the year better. It lowers the barriers you have to face at the top of the year. You do not have to worry too much about your emergency fund being depleted or your credit card statements being too much for your monthly income.
As you start preparing for the start of the year, there are a few things you could look into to help you achieve your goal. It would help to read through them to give you a fighting chance of getting to those goals and be able to stay away from distractions at the start of the year. These distractions can pull you further away from the goals you set and make it more difficult to get back on track. It might surprise you that in 2018, USA Today shares that vacation tops paying down credit cards as a goal in 2018.
Lower down credit card debt
You could have succeeded in paying off your credit card debt at the end of the year as you went and used a significant credit line for the holidays. It makes starting the year a lot better and easier as the statements that will come at the end of the month will be insignificant. However, looking at that zero balance could also push you to start using it again. This is one of the money goals you have to focus on.
It is possible to fall into a false sense of financial security believing that you can start charging again since you have nothing on your card. You can also make yourself believe that since you were able to pay everything off before the year ended, you can do it again anytime you wished. You have to remember that as the holidays are quite known to be an expensive time of the year, this is also the time where you could get some extra cash on hand from gifts to even year-end performance bonuses.
As you start spending and using your credit card again, you have to keep in mind that the goal every month is to pay for the total amount due in full. This mentality can help you make smarter credit choices and screen expenses before you even swipe your card. At the start of the year, get used to paying down your credit card debt so you can carry that attitude throughout the whole year.
Put more focus on your retirement savings
One of the money goals that can help you prepare for your golden years is putting more focus on your retirement savings. There are a number of ways you can do this to get started in saving for the future. However, one of the key ingredients in making this work is consistency. This is one vital key in ensuring you have what you need when you retire.
If you couple this consistent attitude towards your retirement savings with the foresight to start early in life, you get the chance to retire when you want to. That is why it is a good idea to start the first part of the year looking into ways to put more in your retirement account. It will help you take advantage of compound interest where your money grows over time.
The most common places to start with retirement savings is your 401(k) at work. It is even better if your employer offers you a matching program because this is free money on the table. If your finances allow for it, try and max out your contributions to it to take full advantage of the match. You can also look into other forms of investments to help you save more for retirement.
Increase your emergency fund
When you start looking at money goals, your emergency fund should always be on top of that list. There are instances where it makes sense to also have a rainy day fund to complement your emergency fund. It could look redundant but each of them would attend to a very specific purpose or amount of money in times of need. This is important as CNBC shares that about 55 million people have not an emergency fund.
The rainy day fund can help you out with smaller needs you did not foresee. On the other hand, your emergency fund can help you out with the bigger expenses such as medical need or even if you lose your job. The reason for separating the two is for your emergency fund to be intact even if you get a number of small emergencies.
When you begin to look at the amount you need to save for emergencies, there are a number of schools of thought that will come up. The idea is to look at your monthly expenses and save up for it. You may target six months up to a year’s worth of expenses but the important thing is to get started with it. Save a small amount consistently every month and you will that fund grow.
Conduct a financial check-up on your resolutions
One of the best decisions you can make during the first quarter of the new year is to conduct a financial check-up on your money goals. You can put in a lot of targets at the start but if you do not hold yourself accountable to any of it, they are just dreams you will never achieve. Conducting a review and looking at your progress is a great step in ensuring that you are moving in the right direction.
It is also important that as you move in the right direction, you are moving at a pace that you have set in the beginning. You could be saving for your emergency fund but if you keep on setting aside an amount lower than what you are able to, you are selling yourself short. Be consistent not only with the act of saving but with the amount as well.
Pick up a healthy activity
This is one of the best money goals you can take on at the start of the year. It might not seem connected to your finances at all. If it is, you could feel that it is an expensive part of your financial management. It can be taking up a gym membership, paying to join races, or even buying equipment for a sport you want to take up.
This might seem like an expense item or even cut into the time you can spend working more or sleeping in. However, you need to consider this as an investment for your future self. The healthier you are at present, the better your body will be when you get older. This will not only help you enjoy a good quality of life but lower your medical-related expenses.
It is a good idea to have money goals at the start of the year but you need to be consistent with it to see actual results.