New Years has always been a time to reflect and set goals for the year ahead. Most of the time, people focus on resolutions and goals that involve weight loss and fitness. However, it’s also a great time to set financial goals as well. Here are 5 financial goals recommended for 2013:
Goal #1 – Create a budget
Creating a budget is usually the best place to start when getting your finances in order. Creating a budget provides a clear picture of what you have coming in (income) and what you have going out (expenses). This allows you to know exactly how much you have leftover and where you may want to look at making changes. Mint.com is a fabulous free service that allows you to create a budget and track your spending as well!
Goal #2 – Start tackling your debt
This one can be a tough one cause many people don’t know how to go about this, but it doesn’t have to be a complex master plan. If you’ve created your budget (as noted above) then you should have a list of your expenses. Take this one step further and create a list of all your debts, including not just the monthly payment amounts, but also your current balance and interest rates. Start paying down the one with the highest interest rate first (saving you money over time) or the one with the smallest balance (allowing you to pay it off quickest). Once you’ve decided which approach you prefer, commit to paying more than the minimum on that debt – as much as is comfortable for you – and just keep the rest of your debts current. Once you’ve paid that debt off, apply the amount of money you were paying on that debt to another one of your debts, plus the minimum amount you were already paying. This can be a slow process a first, but don’t give up, things will start looking up sooner than you think!
Goal #3 – Start saving for a rainy day
This can be a tough one too, especially when you feel like your money is always tight. But you can start by saving a small amount and simply commit to doing that every month. This could be $25 or it could $200+ – whatever is comfortable for you. Set a goal and commit to saving until you reach that amount. You can do it!
Goal #4 – Take care of your credit
Credit reports can be scary and even sometimes hard to understand, but since so much of the financial world depends on your credit scores and your credit report, it’s good for you to know what your credit profile looks like. Often times, people find that some of the information on their credit reports is wrong and needs to be disputed. Even if the information on your credit report is all accurate… and maybe not so good, it’s better to know what it looks like so you can begin to repair your credit if needed. You can get a free copy of your credit report once a year at no cost by visiting this website. This is NOT like some of those websites that offer you a free credit report in exchange for signing up for a credit monitoring service free trial. You can also take a peek at your credit score for free by using a free service like Credit Sesame.
Goal #5 – Be responsible… but have fun!
This last one should be easy, but it’s important to remember. If you can’t afford to buy that TV or those boots, don’t charge it on a credit card or borrow the money to do it – just wait till you get paid. There is definitely a place for payday loans and credit cards, but you need to use them responsibly. And when you do borrow money, pay it back. This goes for borrowing from a friend, getting an advance on your credit card, or taking out a payday loan. The money is given to you in good faith, so repaying it is the right thing to do. Finally, have fun! If you set your budget, make a plan to pay down your debt, start saving, look after your credit, and borrow responsibly then you deserve to have some fun! Make sure you set aside some money for entertainment! Go on a weekend getaway, go out to dinner with friends, catch that movie you’ve been dying to see! Life is for living – Enjoy it!
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