With the coming of a new year, we find ourselves creating resolutions to improve ourselves and our lives. It’s a time to create goals and plans of how to achieve them. But how many of us prioritize and set financial goals in the new year?
Knowing you want to improve your finances in 2017 is a start, but you need to have some direction in order to achieve your goal. If you are starting to assess your financial situation for the new year, here are 8 tips to get you started.
1) Examine Your Current Financial Situation
Before you can even set goals, you have to know where you stand financially. Without knowing your exact financial situation at this current point in time, any goals you try to set will likely be unrealistic or not as high of a priority as you thought.
How much debt do you have? Where is your money stored? What are your monthly expenses? How much do you have saved for retirement? These are just a few questions to ask yourself to get started.
It’s important to have an understanding of where you sit currently. You might be surprised that your financial situation is much different than you originally thought.
2) Get Specific with Your Goals
Wanting to improve your finances isn’t specific enough. You have to set detailed goals in order to set yourself down a path to achieve them.
Now that you know your starting place, you can examine what should be your top priority. Do you have credit card debt with a high interest rate? Loads of student loans? Struggle with your budgeting? Need to save more?
Instead of making a resolution to be better with money this year, decide on specific goals that will ultimately lead you to being in better financial shape. For example, instead of saying “I want to save more this year,” say “My goal is to save $5,000 in my emergency fund by the end of the year.”
Creating specific goals gives you an end sight. Making it a goal to “be better with money” is subjective. You could increase your savings account by only $10 and claim you are better with money. But wanting to save $5,000 in an emergency fund? Now that gives you an actual objective.
3) Write it down
You may have an idea of what your financial goals are, but you’re sure to find more clarity upon writing them down.
It’s the oldest trick in the book, but for some reason, writing your goals down make them seem more real. It keeps you motivated and reminds you when you forget. For whatever reason, it works.
So write your goals everywhere. Post them by your door, at your desk, in your wallet. When you feel like you want to quit trying to meet your financial goals (and trust me, you will!) these little reminders will motivate you to keep you going.
4) Get Organized
Now that you have goals, it’s time to figure out how to actually achieve them.
The best thing about having yearly financial goals is that you have a deadline. You are trying to see what you can accomplish by December 31, 2017. So whatever your goal is, you’ll need to break it down.
If you have a significant savings goal for the year, calculate how much you will need to save every month to get there. How will you manage this? You may need to organize a calendar to remind yourself to put money away in savings each month, or you may need to take up time to set up an automatic savings account.
By taking the time to break down your goals, your initial goal will look much less intimidating. Think of what you can achieve in a day, a week, and a month. Meeting all of your easier, short-term goals will get you that much closer to achieving your new year’s goal.
5) Find Accountability
How many times have you failed at a resolution? We all have. We create them with a lot of ambition and good intention, but we often are too hard on ourselves. When we fall off the wagon once, we think there is no way to get back on. This is where having accountability is so vital. You need someone who can encourage you to keep going, even when you don’t want to.
Finding accountability for other goals doesn’t seem like a big deal. You can ask a friend to go to the gym with you daily or set up weekly meetings with your boss to discuss professional goals. But people tend to keep their finances private.
It’s important that you tell someone you trust about your financial goals. It could be a close friend or family member or someone you trust in the community. If you feel weird about sharing your financial goals with someone, remember, we all have things we would like to improve in our finances.
6) Review Your Budget
Whether or not a budget was one of your main goals, you need to prioritize budgeting. Why? Because budgeting is imperative to having enough money to achieve your other financial goals.
No matter if you are trying to save money or pay off debt, budgeting is the fuel to get you there. Even if you can free up a few extra dollars in your monthly budget, you can use that money to meet your financial goals.
But imagine you were able to find a way to tighten your budget significantly. Maybe you cut out cable, limited eating out, and went on a shopping ban. You would have hundreds of dollars a month freed up to help you meet your goals.
You cannot achieve your financial goals for the year without reevaluating your budget. For the best success, push yourself to limit spending, but don’t deprive yourself too much. Moderation is key!
7) Make More Money
Wouldn’t it be easier and faster to achieve your financial goals if you earned more money? The good news is that you can always increase your income!
So many people tend to limit their income to whatever they currently make at their full-time job. They don’t think they have control over whatever they earn. While you may feel like your income is dictated by your boss, the truth is that what you make is what you settle for. You are never confined!
When you’re looking over your budget, you probably found that you only have so much you can limit. No matter how frugal you are, you still will have some basic costs.
But what could you achieve if you found a way to earn $100 extra a month? What about $500? Or even $1,000?
The hardest part of making extra money is committing to putting in the hard work and time. But once you stick with it, you’ll be amazed at how much more you can earn, and how those extra earnings impact your finances.
Making extra money can be as simple or detailed as you want. You could look for a higher paying job, or ask for a raise. You could dog sit, nanny, mow lawns, or become an Etsy seller on the side. Or you could start a blog and grow your own freelance writing career from home.
Making extra money has its perks. If your goal is to save $5,000 in an emergency fund this year, you would have to save a little over $400 a month. If you could find a way to make an extra $400 a month, you wouldn’t even have to budget for this savings!
Just remember that you are still entitled to pay taxes on any side hustles, so be sure to set aside money for that.
8) Push Yourself
Dedicating yourself to a financial objective is not going to always be fun. In fact, it will be more challenging than you imagined and there will be many moments you’ll find yourself tempted by impulsion. When it comes down to it, your own motivation is what will result in either success or failure.
You can have every resource and all the help you could dream of available, but, just like any other goal, if you do not remain committed to the cause, you likely will not succeed.
So push yourself! Remind yourself why you set these financial goals in the first place. When dedicating yourself to your finances gets difficult, talk to someone for accountability.
Commit to accomplishing your goals and prepare for the tough times. You can be successful, but it all boils down to you.
_______________________________
Take advantage of a fresh year to focus on your finances. But instead of thinking of only what you want to achieve, remember to plan how to actually accomplish it.
When you’re tempted to quit, remember what it would look like to have more financial freedom at the end of the year. By finding your motivation, accountability, and some wise planning, you can use the year 2017 to find more financial security.
Need ideas for goals? Check out our list of ideas for over 100 goals focused on personal finance, personal development, health, and career.
What are your financial goals for the next year? What would you like to accomplish?
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Pushing yourself is exactly the way to go. I know I try to reassess every once in a while and make sure that I’m still feeling the burn of saving.
Awesome list Rachel! I am really focusing on number 7 this year. Have a great New Year!
Thanks, Tia! Happy new year!
I’d like to save 70% of my take home income and then hit the gym 4x a week. I think it will be a massively successful year if I can hit both goals as being financially healthy and fit will really open some doors up in the future.
I hope 2017 for you and your family turns out wonderful!!!
Those are great goals! Can’t wait to hear how you achieve them! And thank you. Best wishes to you!
As you mentioned, the key to success is being specific about your financial goals. It is easy to generalize a goal, but how do you know when you achieve it? A few of my financial goals this year (know I am still working on all of them) will be to reduce unnecessary expenses (e.g. monthly subscription services I don’t necessarily use of which I have a few!) by $50 each month and increase my student loan monthly payment by $250.