A new year means a new start! That’s why people love making New Year’s resolutions on January 1st. The beginning of any year can feel like an amazingly empowering time to make exciting changes in one’s life. This can apply to every area of your life, even finances.
The shift into 2020 requires some new financial goals, as well as personal ones. However, it can be difficult to know where to start when deciding on new financial goals for the New Year!
It’s easy to get caught up in the hope of a new season. You may get a little ahead of yourself and take too much on all at once. Just like with New Year’s resolutions, strict financial plans can set you up for failure as you’ll quickly become discouraged. It is important to be realistic with your goals and be strategic so that what you can make the biggest impact on your day to day finances.
Gathered together in this article are ten different financial goals that ought to be top priority for the new year. You cannot accomplish all of them at once, so pick a few that are the most important to you right now. If you are successful with your chosen financial goals, then you can add more before the year is up. Focusing only on a few ensures that you stay feeling accomplished and motivated instead of defeated.
Financial Goals to Strive For
Here are a few financial goals to work towards in 2020:
- Create a Spending Budget and Stick to It
If you don’t already have a budget plan in place, then you need to build one. Or if you have a budget already in place, consider updating it to minimize your spending. Check in on your budget several times throughout the month to ensure that you stay on track. There are several online budgeting systems that can help with this, like Mint.
- Write Down All Your Spending
This might seem painstaking but if you get into the habit of writing down each expense, it will quickly become second nature to you. This will make you so much more aware of what you are spending your money on and why. Carry a little notebook and pen around with you everywhere so you can keep a log.
- Cut Down on Your Frivolous Spending
Analyze each spending category in your budget or look at a few bank statements to determine how you might be able to cut down on your spending. Which expenses are absolutely necessary, and which could you temporarily do without? Are there some automatic subscriptions you don’t need? Could you take a pause on buying new clothes or shopping at the fancy grocery store?
- Pay Off Your Debt
Take a look at how much debt you have. Look at all the different minimum payments you have to make each month, including credit cards, student loans, title loans, medical debt, auto loans, and more. Figure out a goal for yourself on how much debt you’d like to pay down this year and how much more than the minimum you can afford!
- Stop Adding Debt to Your Debt
If you want to effectively pay down your debt and regain your financial freedom, then you must also stop acquiring new kinds of debt. This means avoiding opening a new credit card and applying for unnecessary loans.
- Get an Emergency Fund
To be truly financially stable in 2020, you will need to have your own emergency fund built up with around one thousand dollars. This helps ensure you won’t have to stress in difficult financial situations, nor will you have to rely on getting further into debt at those times.
- Improve Your Credit Score
If you want more access to varied financial opportunities in the future, the best way you can unlock those doors for yourself is by raising your credit score. Your credit score is vital when it comes to big financial decisions and may stand in the way of goals you have in the future. This year, focus on improving your overall score by paying your bills on time, diversifying your credit, and fixing any errors on your credit report.
- Begin Saving for Retirement
No matter your age, starting a retirement savings account is an amazing financial goal. It’s never too early or too late to plan a comfortable future for yourself. This is especially true for individuals who have employers that will match what you contribute to your 401(k). That means you could get twice the bang for your buck. This will put you ahead of the curve and guarantee that you are in a good place moving into the future.
- Pursue Your Career Goals
Is your earning potential greater than what your income is? If it isn’t yet, then how could you make it greater? These are important questions to ask yourself as you’re heading into a brand-new year. There is so much career growth that can happen in a year, so think about how you might achieve those goals to greatly improve your finances. If you are unhappy in your job, or even in the career path that you have chosen, it may be time to reevaluate your plans and figure out how you might find a more fulfilling job with greater earning potential.
- Work on a Longer-Term Financial Plan
Short-term goals–like building an emergency fund, getting out of debt, or cutting spending–are excellent ways to take back control of your personal finances so you can be free of worry. But setting long term financial goals can help you access true financial freedom in the grand scheme of your life. Perhaps you can use this year to map out a plan to buy a home, start investing, or build wealth with longevity.
While it’s true that New Year’s resolutions have trouble sticking, when you start small and strategize effectively, you can accomplish your goals and make leaps when it comes to your financial ambitions. So, pick just a few of these personal finance goals and do everything within your power to make them reality. Before you know it, this new year will have brought about a new you.
Photo Credit: Jesper Pluslexia.com
