6 Financial Goals to Stay on Top of This Year

David Bakke is a contributor for the Money Crashers personal finance blog, where he shares his favorites money-saving strategies,6 Financial Goals investing tips, small business experiences, and more.We’re well into the year 2012, and I have to ask: How are you doing with your New Year’s resolutions? Many of us have financial resolutions and goals whether or not we’ve written them down. And many of us are struggling to keep them.¬†But that doesn’t mean it’s time to let them go. Ratchet down your resolutions if need be, but never give up. Here are some of the most common financial resolutions this year, with ideas on how to get back on track to meet your goals.

Financial Goals You Can Make at Any Time

1. Pay Down Credit Card Debt I was once the not-so-proud owner of more than $30,000 in credit card debt. I know from personal experience that interest payments on large balances eat away at your income and virtually tie your hands when it comes to getting ahead financially. Regardless of your level of debt, commit to paying it down and eliminating it. You don’t have to rid yourself entirely of debt this year, but once you start making a dent, those interest charges will shrink, and digging your way out will become easier and faster. If you’re not sure where to start, consider utilizing an online debt management tool, such as Credit Sesame or Ready For Zero.

2. Cut Personal Spending If you think you just don’t have the money to pay off your credit cards, the first place to look is at what you spend. The key here is to objectively differentiate between wants and needs. For instance, you may think that a morning cup of coffee is a need, but it’s actually a want. If you can’t give it up, brew it from home instead of stopping at your local coffee shop. The same goes for eating out for lunch, purchasing gadgets and electronics, and more. If you ask yourself “Do I really need this?” every time you pull out your wallet, you’ll find that you have more money at the end of each month.

3. Live a Healthier Lifestyle A lot of people fail to realize the effect that living a healthier lifestyle has on their finances, but physical fitness and healthy choices can save you thousands of dollars. If you smoke, quit. Eliminating a pack-per-day habit will save you more than $1,500 per year. If you don’t currently exercise, start. It doesn’t have to be overly aggressive, and you can exercise without a gym membership. A mere 20 minutes of exercise three times a week can make a world of difference to your health, well-being, and pocketbook, as physical fitness will cut down on expensive trips to the doctor. Finally, consider a diet that includes more fresh fruits and vegetables. You’ll feel better and you’ll spend less at the grocery store than what you’d comparatively spend on prepackaged or preprocessed foods.

4. Establish an Emergency Fund How much you should have in an emergency fund depends on your own discretion based on your personal financial situation. Generally, the amount ranges anywhere from 6 to 12 months’ worth of living expenses. If you’re self-employed and the sole wage-earner in your household, it’s better to err on the side of caution and, if possible, save a year’s worth of living expenses. However, if you have two wage-earners in your home and you both have steady income, you may be able to get away with six months’ worth. Of course, even saving six months’ worth of expenses can seem daunting, so it’s best to just save what you can. Having an emergency fund of any amount will help you avoid paying for emergencies with credit cards and accruing costly debt.

5. Organize Your Finances Start a filing system to keep all things financial organized and easy to access, and consider utilizing an online organizational tool, such as Mint.com. This will arrange all of your financial accounts in one centralized place, where they can be easily managed from your PC or your smartphone. If you already have a filing system, review it and remove or store older files to clear unnecessary clutter. Some of your records, such as tax records, can be destroyed after at least seven years have passed. However, use discretion when choosing files and records to destroy, as others should be saved permanently, such as IRA contributions. You will want to have these files on-hand and easily accessible in case you raise some tax audit red flags. 6. Educate Yourself Just keeping up with your bills and budget is challenging enough, but solid, informed financial planning will help you in the long run. If you aren’t already, consider contributing to retirement accounts like a¬†Roth or traditional IRA, and learn which you qualify for or which is best for your situation. Also, be sure to take advantage of an employer-sponsored plan, especially if your employer offers to match your contributions. Furthermore, review your insurance coverages, including health, auto, life, and home. Any errors or lack of coverage could end up costing you thousands or more. Taking the time to review these items now will also save you plenty of time and heartache in the future. Reviewing all aspects of your finances can seem overwhelming. If you need help, ask friends and family to help you find a financial advisor.

Final Thoughts

When it comes to keeping resolutions, it is important to make them clear and specific. Create an annual timeline that details what you wish to accomplish and when, and form mini-goals that you can meet on your way to the larger resolution. It is also crucial to set times throughout the year to review your goals and progress. For example, if you see yourself falling short, figure out why you are struggling and see what you can do to get back on track. Also, don’t forget to reward yourself for your accomplishments. Reaching your goals is a slow and steady process, and should not be trivialized or hurried. If you run yourself ragged trying to eliminate debt, for example, you could give up and lose sight of the long-term goals and place yourself in a worse situation. How are you doing with your resolutions? Do you have any others to add to the list?

%d bloggers like this: