It is the time of the year again when we all make resolutions to try improve our lives. If you are one of millions who set financial goals, but never seem to reach them; there are a few simple steps you can take to achieve each and every one this year.
Setting Your Starting Point
Before you can get started setting any type of financial goal you should have a clear picture of your current financial standings. Make a spreadsheet of your monthly expenses separating any “extra” income that can immediately go towards specific goals like savings and paying off debt. When you gain a better understanding of how you spend monthly, you may find new resolutions all together! It’s possible to meet your “start saving for college” goal, you just need to dine out less giving you that little extra to meet your marks.
Be Realistic About Your Battles
Now that you have a picture of your financial standings, it is time to make a list of all of the financial goals you want to achieve in the year. When making this list, remember you are working with in a twelve month time span. If “becoming a billionaire” is number two on your list, you need to readjust your goals to be more obtainable. It is important to push yourself, but be sure your goals are both obtainable and realistic. Some great annual goals include paying off your credit cards, saving for a down payment on a house, or start saving for retirement.
If You Fail To Plan, You Plan To Fail
List in hand, your first instinct is to jump right in and accomplish these goals! Not just yet, as it is important to set very specific plans to reach your each of your financial goals. This step is crucial and often overlooked, leaving many to fail in their goal achievement. Use your monthly expenses spreadsheet during your planning. The plan in which to reach your goals is just as important as the goals themselves.
Use All Resources Available
Remember that when it comes to finances there are many areas where most of us are completely in the dark. It is not a bad goal to become more financially savvy in the new year. Each month learn something new about your finances. A couple great places to become more savvy is learning more about your taxes and current investments. If you have credit card debt, look into lowering interest rates or eliminating the cards with the highest interest rates completely. Rewards programs on your current credit cards can be used towards your financial goals, or even to avoiding going further into debt and getting off track. Just because you are trying to reach a few financial goals doesn’t mean you can’t take a holiday this year.
Everything Is Better Together
One of the final steps in reaching your financial goals in the new year is to find a goal buddy. When held accountable, people are much more motivated to accomplish their goals. A spouse is an excellent source for a financial goal buddy and will help you both have a firm grasp on your family’s finances. If you’re single, find a friend or family who is financially savvy and ask them to be your goal buddy. For those who are private and prefer not to include a person they know into their personal financial picture, remember there are many tools online to help you out. There are sites to sign up for monthly accountability newsletters and other user groups you can join to help keep you accountable and moving towards reaching every one of your financial goals this year.
Timothy Ng is a personal finance writer, and has a real passion for encouraging people to compare credit cards to ensure they get the best deal. Check out his comprehensive guide to credit cards where he provides an in-depth overview and analysis, to help you find a better deal.