Five Financial Goals for the New Year
It is a new year, and a great time to set some resolutions. You should set small realistic goals to help you to achieve your larger goals. You may want to start with a large goal such as buying a house or retiring early and then look at the things you will need to do to reach that larger goal. You should set your smaller goals on those things rather than a broader less specific goal. Set up a support system to make it easier to reach your financial goals. Below is a list of five financial goals that you should consider doing this year:
1. Start to Budget
Budgeting is the most important thing you can do to help you be financially successful. There are a lot of people who make a lot of money but are broke, because they do not manage their money well. The key to successfully managing your money is to plan where you are going to spend your money and stick to it. Setting up a budget for the first time may be intimidating, but you should not let that stop you. If you have a hard time sticking to a budget you may consider using the envelope system. This will help you to stop spending once you have reached the limit each month.
2. Get Out of Debt
Getting out of debt is another key step to taking control of your finances. By really focusing on getting out of debt you can reduce the amount you pay in interest. It is also an incredible feeling to be debt free. You have more freedom to do the things that you want to do. You typically have greater job selection flexibility and you can stop paying interest and start earning interest when you are debt free. It may take some sacrifice to make it happen, but it is worth the effort. You should start by setting up a debt payment plan. Need extra help. UCCU offers free assistance through Balance Financial. Visit uccu.com/memberbenefits for more information.
3. Start Saving Money
Saving is another important key to financial success. Ideally a person should be saving at least ten percent of their income each month. This money will add up quickly. You should consider saving this amount in addition to your retirement contributions if you can afford it. Sacrificing a few dinners out a month can pay off in the long run. By establishing a savings habit now, you are opening the doors for what you can do during your retirement years. If you are struggling to find ways to save you can start by cutting back on some of your expenses. Saving can be more effective if you have something you are saving for as well.
4. Learn About Money and Finances
You should learn more about managing your money as well. You can do this online, or by reading books and magazines. You can set a goal to read at least one in-depth source a month—a book or magazine will give much greater insight into a specific area of financial matters. You may consider starting with “Total Money Makeover” if you have a great deal of debt. If you want some help with budgeting you may want to check out “Rich on Any Income” as well.
5. Begin Investing
You may also want to begin investing the money you are saving. Investing allows you to grow your money at a much quicker rate. However there are more risks involved in investing your money. You need to be sure that you are ready to invest. Many people invest money successfully on their own, but if you are just starting out, you may consider finding a financial planner to help you achieve your goals. A good financial planner will ask you questions about your financial and life goals, and then give suggestions on how to achieve them.
By Miriam Caldwell, About.com Guide