Many people have financial goals that they want to achieve at some stage of their lives. Having the desire for those goals is one thing but putting that desire into action is another. Planning and setting financial goals can be one of the best decisions you make within the year but following and achieving these goals is the more difficult step since it requires a lot of discipline and patience to follow through. That being said, the fact that you came here to find out what financial goals you can set for yourself this year is already a big step that you’ve taken in the first place.
Here are some examples of great financial goals that everyone should consider putting into their new year resolution list if not already done.
Create a spending plan
Having a proper and clear spending plan does not only provide you with an exact control and overview of your personal cash flow but also sets you well for the big financial goals over the long term.
A clearly allocated amount of money on each of your regular expenses prevents you from making incautious spending decisions and essentially supports you with meeting your bills on time. You can completely individualize your spending plan to your spending style with a clear and positive intention on how your finances are going to develop over time. A properly structured spending plan will essentially save you a lot of time and stress.
You shouldn’t view your spending plan as a restriction of your spending but rather as a financial guide that will ensure you achieve your financial goals by supporting you on your spending habits.
After some months of following your spending plan, you then are able to see how well you are doing and where you might want to further adjust your spending budget.
Reduce your debt
Debt is nowadays considered as completely normal. Most college students have to get themselves into a considerable amount of debt to finance their expenses and people oftentimes take mortgages and credits without a clear plan on how they are going to pay it down in the future. It is surprising how easy it is to find yourself in debt these days.
If you have a considerable amount of debt without an exact strategy on how you will eliminate that debt, then you should strongly consider beginning with that right now.
You could start with determining a specific amount of debt you want to pay off this year. After that, you can calculate how much of your monthly budget would be needed to achieve that goal. Note that you probably won’t be able to get rid of your whole debt at a time but consistently reducing that debt will ensure that you are steadily moving towards the finish line.
Start Saving and Investing Regularly
Prosperous wealth can be built by most people. However, not everyone realizes that. The effect of compounding interest has provided massive wealth for investors in the past decades and chances are that you can also achieve that.
If you are not already invested in some financial assets, then you should start doing so. Nowadays, there are several ways to contribute to your long term wealth. Putting money into a 401(k) or IRA/Roth IRA are the most common ways to build massive retirement savings. Otherwise, you could just stick into a relatively safe mutual fund or savings fund. The annual rate of return and fees play a crucial role here.
Setting up a long term investing strategy will be one of the most beneficial financial steps that you can make. Moreover, finding investments with good returns without dealing with a lot of risks doesn’t have to be difficult and time-consuming. For instance, a diversified investment portfolio with a main disposure on stocks and equities can bring in impactful returns in the long term.
While investing in stocks is one of the best ways to build long term wealth, it may also be considered by many people as risky. This shouldn’t keep you from investing since this statement is only true to a certain extent. You should know that historically, stocks have been only going up, which also indicates that the longer the time frame that you stay invested, the more likely it is for you to achieve positive returns.
Your future self will surely be thankful to you for starting investing early and regularly.
Investing in yourself is arguably the best investment that you can make. This one may sound very simple but most people are not fully aware of the great benefits that come from educating yourself for personal growth and development.
This includes reading books about certain topics that help you accelerate in your business career, taking courses or attending seminars. What kind of topics you learn doesn’t necessarily matter as long as it helps you growing and becoming a better version of yourself. The more knowledge you obtain, the more clarity and insights you will have to enhance your finances.
One thing that all successful people have in common is that they constantly keep educating themselves with knowledge in many types of sources. If you don’t find yourself enjoying reading so much, you may choose alternatives such as audiobooks, podcasts or presentations, which have nowadays also become popular and widely known.
“The most important investment you can make is in yourself.”
Track where your money goes
Knowing where all your money is going, by tracking your expenses will certainly give you an accurate overview of your monthly budget, which then helps you make enhancements to your spending.
There are several ways and methods to track your spendings. Nowadays, you can find lots of great budgeting apps that are specifically programmed to help you become more clear about your finances and optimize your spending budget.
If you are not a fan of additional apps, you can always stick to the traditional pencil and paper. Writing down your expenses on paper may even have a better effect on you, as it requires a little bit more brain action than apps, which are optimized and designed to make it as easy as possible for users.
Another effective method that might be easier to manage are computer spreadsheets. With predesigned templates, it might feel easier for you to create and manage your expense spreadsheets.
In the end, it is completely up to you and what kind of style you prefer. Nonetheless, the more clarity you have about your personal finances, the easier it becomes to achieve your financial goals.
While it might not be as easy as it sounds to reach your financial goals, the key thing is to not focus on being perfect but rather being consistent. It is simply not possible to fully predict the future outcome of our lives. Therefore, you should also take into account that any sudden setback and expense could always potentially get into your way. Nevertheless, it is crucial to stay on the ball, despite the obstacles that may be blocking your way to your financial goals.
Please note that you don’t always have to stick to the same plan that you created a long time ago. One key to good financial planning is to always update and adjust your plans to the current circumstances. Needless to say, setting clear financial goals both for the short and long term can definitely be a very impactful decision on your life.