New Year Goal: Set Yourself Up for Financial Success

New Year Goal Blog Post

You can make resolutions at any time of the year, but the start of a new year is an especially popular time. The promise of a fresh beginning inspires many to set goals that enhance their daily lives. Popular resolutions often focus on improving physical, emotional, and mental health, like staying active, traveling more, or taking up a new hobby, as well as making positive financial changes.

If improving your financial situation is on your to-do list for the new year, check out these five tips to set yourself up for financial success.

1. Prioritize Your Financial Goals
Figuring out your financial goals is a great first step for improving your financial situation. To help prioritize, separate the goals by when you think you can accomplish them — short-term goals can be accomplished in less than six months, medium-term goals can take between six to twelve months, and long-term goals can require more than a year to complete. As you’re sorting, make sure you’re being realistic on the time and money it will take to cross off each goal.

2. Create a Budget
After you’ve set your financial goals for the year, creating a new budget is the next step. Budgets can help control your spending habits, determine where your money is going, and keep you on the right track to meet your goals. Budgets can also help you figure out expenses you no longer need, which can free up money to be allocated elsewhere. Learn more about creating a budget here.

3. Pay Off Credit Card Debt
Falling into the credit card debt trap is easy to do because credit cards are designed to be convenient. With cash, you can see when you’re running low on funds; but with credit cards, it’s so easy to forget you’re dealing with real money. Purchases can add up quickly, and you might not realize how much you’ve been using your card until you get your monthly statement. Because of the high interest rates associated with credit cards, you often end up paying more than if you had used cash.

4. Fund Your Retirement Early
Retirement might seem far away for some of us, but the earlier you start saving, the better position you’ll be in when it comes time to clock out from the working world. Although Social Security can help you with some of your retirement expenses, it’s often not enough. By planning and saving as early as possible, you’ll have the power of compound interest on your side. Depending on the lifestyle you envision for yourself in retirement and when you plan on retiring, these factors will impact how much you’ll need to save for your golden years. Learn more about retirement planning here.

5. Have a Savings Plan
Saving may seem like an impossible task when you’re trying to pay down debt. However, if you pay yourself first by automatically depositing a certain amount into a savings account, you will be less tempted to spend it. Start out with a small amount or percentage of your paycheck, and then increase that contribution as your salary increases or as your debt decreases. These savings can especially come in handy when an emergency arises. Learn more about starting an emergency fund here.