Ah, a new year. A fresh start. I love the New Year time because everyone is looking forward to what they want to accomplish personally, professionally and (hopefully) financially. Maybe you say, "This is the year I start contributing more to my retirement," or, "This is the year I'm finally going to say goodbye to credit card debt."
All of that is very, very good.
But it isn't enough to just say what it is you want from a new year aloud (although I highly, highly recommend this too.) You have to create an action plan.
I am really great at creating action plans; I had a very detailed one that helped me pay off $8,000 of credit card debt in just 90 days. Unfortunately, I got so tired and burnt out from doing that much of a blitz, I kinda phoned in the rest of my 2015.
Fully Fund Emergency Fund (I'm only 50% there)
(I owed about $1800 dollars after all was said and done, right around the time I started working for myself. NOT FUN!)
Max out my Roth IRA Contributions (I still have until April to do this, but I'm still nowhere close)
Save an additional $3k for 2015 Taxes
At the end of 2015, I was only able to cross off 3 of my 6 goals. Which is better than nothing, especially given the $7,000 or so I spent on home repairs this year and the uneven cash flow I experienced my first year as my own boss. I don't feel bad about what I accomplished, but I want to strive for more in 2016, and so I'm going to share the process I'm using to tackle my financial goals for this year with you now.
Prioritize the things that are losing you money
Debt. It's expensive. Every dime that sits in savings is worth less when you have it. And while it is hard to manage debt with other savings goals like retirements and emergency funds, the fact of the matter is that with interest rates on savings accounts so low, you need to pay off high interest debt first in order to get ahead.
So when brainstorming your financial goals, prioritize the items that are costing you the most.
Throw In Some Savings Goals Too
I think having a nice emergency fund before you pay off debt is important to keeping you out of the cycle of using credit to cover the unexpected.
Realistically, will you really be able to accomplish everything? Probably not. You never know what could come up, but what's the quote? You miss the shots you don't take? Think of your financial goals like that.
Decide what YOU want
Sure, you can follow my advice or use the ideas you find on my blog and others to brainstorm a set of financial goals for yourself. Just don't forget to listen to your own inner voice. What do
you
want to accomplish? Which goal completion would make you happiest? Which completion would free you up the most to do something else you really want to do?
With Those Three Things in Mind...Here are My 2016 Financial Goals
- Pay Off My Car - I've had it for about a year now and would really like to allocate the car payment money to my retirement accounts.
- Finishing Funding My Emergency Fund
- Allocate money for retirement (both 2015 and 2016) - You can contribute money for retirement for 2015 up until April of this year, which I'll need to continue doing if I'm going to meet my 2015 goal.
- Save up for $6,000 structural repair needed on my house - Attempting to sell my home and all the flooding issues I've had in the basement means I need to make some serious repairs to the home before I can attempt to sell it again. Sounds like fun doesn't it? Oh, it is. But getting this off my plate would help me feel a lot better about the state of my home and my chances to earn money on it after the sale, so it's going on the list.
Put Everything into Bite Sized Pieces
The trick to sticking to your New Year's Resolutions is to make them both
Some people like to take their financial goals and break them down month by month, for example, if you know you have $12,000 worth of financial goals this year, you then allocate $1000 each month to them. Or you can do a "debt snowball" approach where you take either the biggest goal, (or smallest one) knock it out completely, and then move on to the next.
However you decide to slice it, take time to write your goals down somewhere. I handwrite mine in my "Dream" notebook and also put in a checklist for them in Trello, which is where I keep track of everything for my business. It feels good to physically check (or click) things off as I accomplish them.
Maybe you need to start smaller and commit to setting your first budget, or tracking your expenses for a month or two to see where you're spending. Maybe it's to save up your first $1000 and then tackle your cards and student loan debt. Whatever it is, please know it is never too late to start and it doesn't matter where you start; it's where you finish.
More New Year Resources
There are so many fantastic posts out there about getting off on the right (financial) foot this year. Here are some of my favorites!
"Yes...And" Your Life - by Stefanie O'Connell
10 Must Read Goal Planning Articles - from Side Hustle Academy (love this one!)
Tell me in the comments...What is it you are planning for in 2016?
Our 2024 Coverage Needs You
It's Another Trump-Biden Showdown — And We Need Your Help
The Future Of Democracy Is At Stake
Our 2024 Coverage Needs You
Your Loyalty Means The World To Us
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
The 2024 election is heating up, and women's rights, health care, voting rights, and the very future of democracy are all at stake. Donald Trump will face Joe Biden in the most consequential vote of our time. And HuffPost will be there, covering every twist and turn. America's future hangs in the balance. Would you consider contributing to support our journalism and keep it free for all during this critical season?
HuffPost believes news should be accessible to everyone, regardless of their ability to pay for it. We rely on readers like you to help fund our work. Any contribution you can make — even as little as $2 — goes directly toward supporting the impactful journalism that we will continue to produce this year. Thank you for being part of our story.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
It's official: Donald Trump will face Joe Biden this fall in the presidential election. As we face the most consequential presidential election of our time, HuffPost is committed to bringing you up-to-date, accurate news about the 2024 race. While other outlets have retreated behind paywalls, you can trust our news will stay free.
But we can't do it without your help. Reader funding is one of the key ways we support our newsroom. Would you consider making a donation to help fund our news during this critical time? Your contributions are vital to supporting a free press.
Contribute as little as $2 to keep our journalism free and accessible to all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. If circumstances have changed since you last contributed, we hope you'll consider contributing to HuffPost once more.
Support HuffPostAlready contributed? Log in to hide these messages.