As 2023 approaches, it's common to set new targets for your own health, travel, family, and money. However, to set healthy financial goals, it's important to understand financial basics and work on your own financial literacy. To budget right, you need to know what to budget for. To invest, you need to know what you can afford to. To save for retirement, you need to know which account is right for you.
No matter what financial goals you set for the New Year, it's important to have a plan and be realistic. Once you understand basic budgeting, saving, and investing metrics, it's easier to decide on calculations that make sense for you. Depending on your situation or current lifestyle, there are different tips to help get your finances in shape.
When setting New Year's financial goals, it's important to be realistic and understand the basics of budgeting and investing before making any decisions. Here are some tips for making money goals in the New Year:
1. Track your spending. Knowing exactly how much you're spending can help you figure out where to cut back so you can put more towards savings and investments. Make sure to include all your fixed expenses like rent or mortgage payments, utilities, and other bills, as well as variable costs like groceries, entertainment, and dining out.
2. Set achievable goals. To make sure your New Year’s Resolution is successful, break it down into smaller goals that will be easier to manage. For example, instead of trying to save $20K in a year, focus on saving $500 per month from your budget so that it becomes more manageable. Too often, people set overly ambitious financial targets, which can be hard to reach or maintain. Rather than aiming for a complete overhaul of your finances, focus on specific elements like reducing debt or increasing savings.
3. Analyze your current finances and situation. Take a look at what kind of debt you have (credit cards, student loan debt), what assets you already have saved up (401K plans), and what kind of coverage you have with insurance policies (life and health). This will give you an idea of where you can make cuts and adjustments in order to reach your New Year’s Resolution goals faster.
4. Prioritize high-interest debt first when paying down loans or credit cards. When paying off debt or reducing loans balances, prioritize those with higher interest rates first before tackling those with lower rates as they cost more in the long run if left unpaid or ignored for longer periods of time.
5. Take advantage of tax refunds or bonuses when possible to boost savings accounts or pay down debts even further – this could help speed up reaching New Year’s financial resolutions significantly!
6. Research different retirement plans available based on income level & employer type (traditional vs Roth IRA) to find one that works best for you – that way you can start contributing more towards retirement investments sooner rather than later! By contributing regularly through automatic payroll deductions we are more likely to stay consistent with our New Year’s goal of building wealth over time without feeling too much financial strain in the near term.
7. Re-evaluate & adjust money goals every few months throughout the year – this helps ensure that progress is being made towards New Year’s Resolution targets while still taking into account any unexpected changes or circumstances that may arise during the year which could affect financial situations differently over time.
Finally, don't forget that while working toward money goals is important, it should not overtake other aspects of life such as work-life balance, mental health and overall well-being. Prioritizing these areas is essential in order to achieve financial success over the long run. Setting healthy New Year's resolutions is a great way to increase financial literacy and lead us closer towards achieving greater financial freedom!
Remember, the New Year is a great time to make positive changes in your life and having a sound financial plan is one of them! With knowledge and diligence, this New Year can be your best financial year yet.
You don't need to wait until January 1 to practice smart spending habits. FitMoney's FinanciallyFit Certificate is now available for K-12 students to begin building their own financially fit futures.