5 Financial Goals for the New Year

The new year is here, and now is the time to create financial goals to help you set yourself up for a more financially stable future. Sometimes, organizing your finances can be daunting, but setting a few yearly goals can be easier than you think. Start the year off right by getting started on the five financial goals listed below.

1. Draft a Monthly Budget

Even though this may seem like an obvious goal, many people find it hard to draft a budget each month and stick to it. Knowing where your money goes is the beginning of gaining better control over your finances, and the more detailed it is, the better. When creating your budget, ensure every penny is accounted for, including savings, investments, and money for clothing, food, and entertainment. This will help direct your focus to areas where you can improve and help you decide where to allocate the extra money you get from sticking to your budget.

Determine your savings plan and automate it around your pay days to ensure you pay yourself first. 

2. Take Control of Your Debt

Debt can be one of the primary roadblocks to your financial success. Make a reasonable plan to reduce your debt and stick to it. You can start by determining a reasonable amount of debt you would like to pay off for the year, ensuring the goal is attainable so that excess spending doesn't back up into  credit cards. . Next, determine how much you will need to pay each month to reduce your debt by the goal amount. Finally, you will need to look at your budget and find a way to fit in this amount each month, even if it means cutting back in other areas. It is also important to make sure that you do not add any more debt throughout the year.

3. Make an Emergency Fund a Priority

Medical costs, major vehicle repairs, job layoffs, and house maintenance can quickly derail a budget. Make sure that you have a fund set up specifically to handle these unforeseen expenses so that you don’t have to alter your monthly budget to accommodate. A good rule of thumb for an emergency fund is to start with a month’s income plus $1,000. Budget an amount each month for your emergency fund. If an emergency were to require the funds sometime during the year, you will need to regrow your funds.

4. Prioritize Retirement Savings

Saving for retirement is something often put on the back burner until it is too late. The power of compounding means the sooner you begin saving for retirement, the more time these savings will have to grow for a better return on your investment. Work with your financial advisor to determine which retirement savings vehicles may be best for you.

5. Create a Long-Term Financial Plan

Goals can be more difficult to set if you have difficulty envisioning the rewards that come with financial stability. Consider any long-term financial goals you may have, such as buying a house or retirement. Draft a plan that includes saving, investing, and other ways to build the wealth you need to achieve these goals. You can start with smaller goals so that they seem less daunting. A plan will help you stay on track and guide your financial decisions. Again, work with your financial advisor to determine which  savings vehicles work best to achieve your goals.

Make this the year that you take control of your finances and get on the right track to achieve your goals.