It’s almost the end of the year, quite hard to believe how fast time has gone, and we’re almost into a new year. A new year is the best time to consider setting new goals and making sure they’re attainable and can get fulfilled before the year ends. Whether you choose to have a thousand goals in your to-do list, financial goals should come first.
The benefits of financial goals for your new year’s resolution.
The very first step to making your goals come into reality is knowing how to set financial goals for your new year’s resolution. Regardless of your financial situation, goal setting is important for a number of reasons.
- Stay focused and conscious of your current state.
- Financial goals help you to understand what you are trying to achieve
- Setting financial goals can dictate how much money you can save and spend during the year.
- Just like completing any goal, there is always a sense of accomplishment. Fulfilling your goals can help you to become more confident in your saving capabilities.
Common financial goals to add to your new year’s resolution?
Financial Goal 1: “This year, I would like to learn how to save my money”
Financial goals can be challenging to achieve if you don’t know what finances are and more so the different types of financial goals you can have. Luckily, you have already started your journey to saving more money.
Chances are if you are reading this article, you’re already thinking about saving. Its today’s online world, you can learn almost anything. You can learn about money from financial experts or also get all the necessary information you need online. With the digital era in place, you have a wide variety of content at your disposal.
Learning is a process, and it never stops, so you could keep reading blogs, magazines, or any other financial resources from the beginning of the year to the end. This will help you to better understand how to save money.
Financial Goal 2: This year I would like to save $___ by December
Setting a clear amount that you would like to save is the first step to achieving financial success. To do this you must be able to set SMART goals. This means that you need to be able to actually achieve this goal. There is no point saying “I would like to save $40,000 this year” with an income of $45,000. This is an unrealistic goal as you have many expenses to factor in.
Saving means keeping some extra cash for later use. When you start learning about money, you’ll also learn so much about how to save money and the benefits of saving.
You could be saving for your retirement years or to purchase your dream house amongst many other things. You could be saving as part of your short-term financial goals or for your long-term financial goals, as well. Long term financial goals will take a longer time compared to short term goals. Regardless of your goal, you must be able to budget. This takes us to the third financial goal.
Financial goal 3: “I will create a budget plan in the new year”
If you don’t already have a budgeting plan in place, this is a necessary financial goal for the New Year’s resolution list. Without a budget, it can become super difficult to assess how much money you can spend and how much you can save.
Think of it like this. Imagine trying to build the most complicated piece of furniture from Ikea without the instruction paper. Now imagine trying to do that with little experience in assembling furniture.
It’s the same with budgeting.
If you’re used to overspending and splurging without actually saving, it can become near impossible to save money. A budgeting plan is your instructional manual. Budgeting plans can help you to assess your income and expenses. They will then outline where and how much you can potentially save each week, month or year. With this information at your disposal, you can then set short term and long term financial goals.
You should always take your time to create a budget because a lot of discipline is needed to achieve the goal. Set a certain amount of money to use in a given time frame, and once it’s over, don’t think of using more instead wait for the period to be over. Luckily there are online budgeting planner calculators available to help you quickly and easily establish a budget plan.
New Year’s financial goal 4: “I will reduce my overall debt this year by ___%.”
With the New Year, you surely don’t want to go having credits everywhere with you. Debt is annoying and stressful. It is an unwanted pressure in your life. Living a life where you know you owe no one is always the best.
If your debt is piling up, work towards reducing it. If you have multiple debts such as credit cards, personal loans, utility debt and so on – start paying it off. With a smart budget plan in place, you can use your savings to pay off your debt. Alternatively, you can allocate more towards your debt repayments.
Don’t forget to factor in special occasions such as the holidays and festive season. These periods can quickly get you into debt by spending more than you have.
New Year’s financial goal 5: “I would like to invest my money into real estate this year”
If you have the extra cash to put into something else, consider investing.
To do so you can consider investing in real estate, shares, cryptocurrency or even superannuation. There are various forms of investment opportunities. To do so, however, you will need various income streams. At the same time, you will also need to be wary that investing has many risks associated with it. For this reason, you must research and take precautions. The last thing you want is to lose all your hard-earned savings.
Final thought
Don’t choose goals that will end up destroying your life as it is challenging to rebuild a ruined life. In this article, we focus only one the five reasonable financial goals for your new year, but you can add more to the list as far as they make your life better.
