The new year is here, and now is the time to create financial goals to help you get on track and set yourself up for a more financially stable future. Sometimes getting your finances organized can be a daunting task, but by setting a few yearly goals, it can be easier than you think. Begin the year right by getting started on the five financial goals listed below.
1. CREATE A LONG-TERM FINANCIAL PLAN
Goals can be more difficult to set if you are having difficulty envisioning the rewards that will come with financial stability. Consider any long-term financial goals you may have, such as buying a house or retirement. Draft out a plan that includes savings, investing and other ways to build the wealth you need to achieve these goals. You can start with smaller goals, so they seem less daunting. Working with us to put a plan in place will help you stay on track and guide your financial decisions.
2. PRIORITIZE RETIREMENT SAVINGS
Saving for retirement is something often put on the back burner until it is too late. The sooner you begin saving for retirement, the more time it will have to grow, and the better return you will have on your investment. We will work with you to determine what retirement savings vehicles may be best for you.
3. DRAFT A MONTHLY BUDGET
Even though this may seem like a common goal, many people find it hard to complete and stick to this task each month. A monthly budget is the beginning of gaining better control of your finances, and the more detailed it is, the better. When creating your budget, make sure every penny is accounted for, including savings, investments, clothing, food, entertainment, etc. It will not only help you realize how much you spend each month, but it will also help direct your focus to areas where you can improve and set goals for the extra money you may have when sticking to your budget.
4. TAKE CONTROL OF YOUR DEBT
Debt can be one of the primary factors that can hold you back from financial success. Make a reasonable plan to reduce your debt and stick to it. You can start by determining a reasonable amount of debt that you would like to reduce for the year, making sure that the goal is attainable. Next, determine how much you will pay each month to reduce your debt by the goal amount. Finally, look at your budget to find a way to fit in this amount each month, even if it means cutting back on other areas of the budget. It is also important to avoid adding more debt throughout the year.
5. MAKE AN EMERGENCY FUND A PRIORITY
Medical costs, major vehicle repairs, job layoffs or house maintenance can quickly derail a budget. Make sure you have a fund set up specifically to handle these unforeseen expenses, so you don’t have to alter your monthly budget to accommodate. A good rule of thumb for an emergency fund is to start with a month’s income plus $1,000. Once this goal is achieved, you should keep saving until you have about six months of expenses. Set aside an amount each month in your budget to add to your emergency fund. If you need to use it for an emergency during the year, you will need to regrow it. If you already have an emergency fund, we can help discuss saving options that may provide a higher return than a savings account.