Financial New Year's Resolution Goals for Any Income
The New Year is a good occasion to make some positive changes in one's financial situation. Regardless of your level of income, you can make small adjustments and set goals. Then, you can begin working toward these goals when it comes to your finances. You'll finish this new year in the best financial health if you set financial New Year's resolution goals now. Afterwards, you need to stick with these goals throughout the year.
Unfortunately, it's not always easy to stick to New Year's resolutions until the end of the year. You need to plan carefully now and put effort into staying motivated throughout the year. This will maximize the chances that you'll meet your goals. You also need to set the right goals. It's important that you carefully think through your financial New Year's resolution goals.
If you're concerned about your financial condition, chances are you're probably dealing with some debt. Getting out of debt is often a struggle. However, getting out of any debt that you're in should definitely be part of your financial New Year's resolution goals. One thing you can do is set a little money aside each month to pay down your debt. Be realistic and don't try to pay off everything too quickly. This will help you to stick with your debt reduction goals.
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By setting goals, creating a budget, and paying down debt, you can begin to excel financially this year.
Setting Goals
The first step when working towards financial New Year's resolution goals is figuring out what those financial goals should be. Identify what you want to change about your finances. Figure out where you want to be a year from now. Also, think about where you want to be five or ten years from now.
You shouldn't underestimate the importance of the phase of setting financial goals. Setting the right goals is essential. Goals help with motivation and make it easier to gauge progress over time.
Use the resources available to you for setting goals. There are plenty of resources out there that help you set achievable savings goals. There are also goals to help you figure out what credit score and debt management goals to shoot for.
Plan goals but leave room for changes
While you can and should set goals, it's important that your goals are flexible. Surprises and unforeseen obstacles come up. These scenarios make it important to adjust goals to stay motivated and optimistic.
One's finances are always a work in progress. Not only should goals stay flexible according to obstacles, but also according to possible windfalls. Surprises don't always have to be negative. Maybe some positive surprise like a raise will come up that makes it possible to set even higher goals.
Be sure to write things down
Don't make the mistake of only setting goals in your mind. You'll struggle more to focus on goals when they haven't been written down. If you don't write goals down, you might forget about them or unconsciously change them.
It's good to be organized about your efforts to achieve financial New Year's resolution goals. Most people who want to change their financial situation but don't write down their goals don't get too far.
Writing down your goals is the only way to have constant and unchanged goals in mind. When you write goals down, you can create a checklist. Each time you make an achievement, you enjoy the satisfaction of checking an item off your list.
Don't be unrealistic
One of the easiest ways to overwhelm and discourage yourself is to set unrealistic goals. You're only going to be able to do so much in a given period of time. While you, of course, want to improve your finances, you are limited by a certain amount of income. You also still need to pay for some expenses.
While you can increase your income and decrease expenses somewhat, you'll always work within some limits. As you set goals, be aware of your limits. Don't make things too hard for yourself. Remember that you have time to make things happen. It's important to treat yourself from time to time and take a break from your savings regime.
Start tracking your progress right away
Being organized and writing things down isn't just important for goal setting. It's also essential for tracking progress along the way. Track your progress by doing calculations each week. Calculate your income. Calculate your expenses. Also, calculate your debt. Compare all of these numbers to previous weeks' calculations. Also, compare these numbers with your goals.
When you track your progress from the start, you can see if you're meeting your goals or not. You can also make adjustments as necessary. When it comes to reducing debt and improving finances, probably your expenses are the most important number. For most of us, we have more control over our expenses than our income. You should cut down your expenses as much as possible. Try to cut unnecessary expenditures out so that you have more money left over to save each week.
Celebrate intermediate accomplishments
Give yourself credit for the accomplishments you make. It's hard to stay motivated when you don't give your accomplishments the recognition and celebration they deserve. Make a list of "My Financial Goals", and motivate yourself by planning how you'll celebrate the achievement of each.
There are a lot of things you can do to celebrate. Treat yourself to a dinner out at your favorite restaurant after you pay off a loan. Go on a day trip to a favorite nearby destination if your credit score goes up. Take a small vacation if you get a big promotion and raise at work.
Make sure you recognize the good things that happen. This helps you to realize how close you're getting to your financial New Year's resolution goals. It also makes the pursuit of these goals more enjoyable.
Creating a Budget
Creating a budget yourself is important for determining how you are going to achieve your financial goals. A budget is a plan that shows you your income versus expenses. Your budget accounts for your income and details what it will be spent on. A detailed budget is essential when it comes to your financial New Year's resolution goals.
As with your goals, your budget also needs to be written down. Don't think you can set an effective budget in your head. You need to do the math on paper. When setting a budget, start with the amount of money you earn. Then, determine which expenses are unavailable for you. Unavoidable expenses probably include a rent or mortgage payment. They also may increase a car and insurance payment. Of course, another necessary expense is food. However, most people can significantly reduce food expenses by avoiding eating out and buying premade meals.
The tricky part of setting a budget is addressing your recreational or unnecessary expenditures. Most of us enjoy spending money. We need to create a budget that allows us to improve our finances while also allowing us to enjoy life. Make sure you're not too hard on yourself when setting your budget. If you are, you might find it hard to stick to your budget. Give yourself some treats here and there, but make sure your budget will allow you to work toward your financial New Year's resolution goals.
The following are three important things that your budget plans need to show:
The amount of money you bring in
Hopefully, you're in a position to increase your income as you please. Those who are self-employed could earn more by simply working more. Also, some people have jobs where they can take on extra hours or shifts if they want. If this is an option for you, then you should, by all means, take advantage of it.
Increasing your income improves your prospects when you create your budget. In terms of your budget, the income you bring in shows what your prospects and limits are. Any budget needs to start with awareness of the income you're working with.
The amount of money you spend
In a budget, the income amount is divided between the amount of your expenditures and your savings. Your goal is to maximize your savings and minimize your expenditures.
Minimizing expenditures can be challenging. When minimizing expenditures, do research on ways to get the things you need cheaper. If your rent payment is eating up your income, consider moving to a more affordable location.
While some expenses are unavoidable, you can reduce almost all expenses with some effort. For example, you can look for cheaper ways to get groceries or take advantage of insurance discounts. With a little effort, you'll be surprised at how much you can cut down your monthly expenditures.
You should factor some spending money into your monthly budget for recreation and entertainment. However, the more you minimize this amount, the more funds you put toward improving your finances.
The amount of money you save
If you have debt, divide your income between the amount you spend and the amount you put toward your debt. While putting a little aside for savings is ok, you should focus on paying your debt. That's because your debt accumulates interest over time.
If you're not paying down debt, put your excess funds into a savings account. Ideally, you should look to put your funds in an account that will accrue interest. Below, you can take a look at some of the best savings account options out there. Once you start to accumulate significant savings, it's time to invest to take advantage of investment income.
Getting Out of Debt
Those who are setting financial goals often are working to get out of debt. Debt can feel overwhelming and crippling for many people. However, there are many tools available to consumers to help them get out of debt.
It's important to use the resources available to you to achieve financial New Year's resolution goals. Unfortunately, a lot of consumers aren't aware of all the resources available to them.
The following are a few of the most helpful tools available for getting out of debt.
Debt consolidation
If you owe to a lot of different creditors, simply keeping track of all your debt can be difficult. In this case, you might want to look into debt consolidation. Debt consolidation involves taking out a loan to pay off all of your other debts. When you do this, you only have one debt to pay off.
Debt consolidation loans aren't just designed to simplify your debt. They are also designed to make your debt more affordable. Debt consolidation loans make the debt more affordable by offering lower interest rates.
You want to look for a debt consolidation lender who will charge less interest than your existing creditors are charging. Even a small difference in interest rates can save you a lot of money if you have significant debt. Debt consolidation is one of the first things you should look into if you're struggling with debt.
Unused possessions
Don't overlook all the unused possession around your home that have value. You probably have a lot of items you could sell. Not only will this declutter your home, but it could also provide you with a lot of money to put toward your debt.
Consider having a garage sale to make some money off of items you no longer want. Also, you can post ads on sites like eBay to get rid of stuff you're no longer using.
Second jobs
Anything you can do to increase your income will help you with debt. If you're particularly ambitious about overcoming your debt issues, consider looking for a second job.
Supplementary income could make it possible to pay down your debt very quickly. Taking a second job could also benefit you professionally. It could give you more work experience and help qualify you for advancement at your main job.
Taking on more work has another hidden benefit in addition to increasing income. A second job also keeps you busier. This gives you less time to spend money and protects you from the temptation to buy more.
Payment plans
Create your own payment plan for dealing with debts that seem overwhelming. If you have a high credit card balance, figure out how much you can put toward it each month. You can probably schedule automatic payments with your credit card company. This way, payments will automatically come out of your account without any effort on your part. All you have to do is work and make the money. Then, your debt will automatically go down over time.
Financial smartphone apps
Your smartphone could turn out to be a huge help when it comes to debt. These days, there are many financial apps out there. These apps help you do things like monitor your credit and track your spending. They can also help you to calculate your budget.
Your bank might offer budgeting and debt management features on the app it provides. Don't underestimate how helpful apps can be in keeping you on track with financial New Year's resolution goals.
Cash
Perhaps cash is the best tool when it comes to fighting and preventing debt. Simply start paying for everything in cash. Paying for things in cash at least helps you to avoid taking on new debt. If you make a rule that you will only pay in cash from now on, you won't ever have a problem with debt again.
While borrowing and using credit cards can be helpful in some situations, these things are the cause of debt. Switch your way of thinking about spending. Credit card companies are eager to encourage you to rack up high balances. That's because they make money on you.
Set a new goal to pay in cash this year. This will definitely help with your financial New Year's resolution goals.
Final Thoughts
Now is the time to turn around your financial situation. Make your financial New Year's resolution goals and use the tools available to you to achieve them. While it can be challenging to completely pay off debt, being debt-free is the best way to live.
Set your goals, create your budget, and use the right tools for you. You don't need to live with debt anymore. It's time to make the changes in your life that will make your financial dreams a reality. All it takes is the will and the persistence to turn bad financial habits around for good. Get started today!