‘Tis the season of goal making, and it would be a mistake to not set some financial goals for yourself. If you’ve got solid goals and thorough plans to achieve your goals, you’ll have a much more financially comfortable year.
Setting too many goals is a great way to achieve none of them, so we’ve chosen just a few new-year goals for you to pick from as you work towards financial freedom in 2020.
Stick to a Budget
The first key to financial freedom is having control over your finances. The key to having control over your finances is having control over yourself. That’s where a budget comes in.
To write a good budget you first have to know how you currently spend money. Track your expenses for a couple of months, then look at what you spent and decide how you really want to spend that money.
Budgets don’t have to be complicated. One way to write a budget is to create a simple spreadsheet with your expense categories, how much you want to spend, and how much you actually spent in each category.
An even easier way to create a budget is to use a personal finance software system like Mint or Quicken.
Sticking to a budget takes a lot of work, but it will help you live the life you really want, not just buy the things you kinda want.
Build an Emergency Fund
The only thing we can plan on in life is that it will not go according to plan.
We mention emergency funds all the time on our blog because they’re so important. An emergency fund is the best tool you can have to defend against debt.
With an emergency fund, you don’t have to take out a loan when life takes an unexpected turn because you have the money you need to pay for it.
Most experts advise that you keep about three to six months’ worth of expenses saved in your emergency fund. That way, if you lose your job, cannot work, or have surprise expenses, you’ll have that safety net.
Get Out of Debt
If you’re in debt, getting out of it should be a priority
Completely paying off all debts including car and house payments this year may not be possible, but you can make a goal to put more effort into becoming debt-free.
Here’s a fact: The longer you hold debt, the more you pay for what you borrowed in the first place. Interest never sleeps, so the faster you pay off the principal of a loan, the less interest you have to pay.
In the words of finance guru Dave Ramsey you need to have “gazelle intensity” when it comes to getting out of debt.
Cheetahs are the fastest land animal on earth, but they don’t always catch gazelles. Why? Because gazelles know how to run for their life. They zigzag and dodge until the predator gives up.
That run-for-your-life intensity will get you out of debt faster so you can be on your way to financial freedom more quickly.
Donate to Charity
There is a person, group, or cause that you can contribute to no matter your financial situation.
Obviously, the money you give will go to great use and will really help a cause you care about, but it also does a lot of good for you.
Seeing people in need and giving from your own resources makes you more grateful for what you have. That gratitude translates into happiness. The more you give, the happier you’ll be.
So next time you hear about someone or something that really needs some help, do something about it. Whether you can contribute $500 or $5, give it a try and see how it changes you.
Save for Something Fun
There’s nothing inherently wrong with buying something fun. Splurging a bit is only wrong if what’s more important suffers.
If you’re in a solid financial position and have a serious want, save for it, buy it and enjoy it this year! Material things don’t bring lasting happiness, but they sure can be fun if we go about getting them in a smart way.
A year is plenty of time to make some serious progress towards becoming completely financially free, and there’s no better time to start than now.
Make some goals, formulate some plans and get after it!
Leave a comment with your new year resolutions.