Setting Financial Goals for the New Year

The new year brings a fresh start, so what better time to consider your finances and reset for the next 12 months of spending and saving. Creating and tracking financial goals gives you a roadmap for your money and makes it easier to spend your hard-earned income as planned.

Stay mindful of your budget and income to make smarter choices with your finances. Read on for tips to help motivate you and secure your financial future this year.

Why Financial Goals Matter

While it’s easy to talk about how you hope to spend, invest, and save your money, it takes dedication to make those dreams happen.

Here are a few more ways setting financial goals can positively shape how you govern your finances:

Sets You Up for Success

Creating and monitoring financial plans gives you a clearer path toward prosperity. You’ll also feel accomplished meeting your goals each month, leading to more confident decisions with your money.

Provides for Your Future

Setting financial goals involves putting money aside for retirement and planning investments for your monetary future. The financial choices you make today affect how you’ll live on a fixed income once you leave the workplace.

Prepares You for Emergencies

Financial goals should also include creating an emergency fund that gives you a cushion for unexpected events like car and home maintenance, medical needs, and other life events. Experts suggest keeping at least $1,000 in your account for emergency situations. Saving enough to cover your income for three to six months is even better. 

Limits Overspending

Financial goals often stop you from spending on unnecessary items like excess credit card charges or impulse buys at retail stores. Setting a clear budget helps you determine what items are essential and how much discretionary funding you have for extras.

How To Set Financial Goals for the New Year

1. Review Your Budget

The new year is a time to revisit your budget to figure out what’s working and make changes according to your financial needs and habits. Looking at how much you spent last year gives you a good starting place to adjust for current wages and any additional debts or monthly payments.

If you don’t already have a planned monthly budget, the new year is a great opportunity to get started. Creating an outline allows you to track exactly where your funds are going. Use monthly bill statements to fill in the blanks for everything you owe and pay stubs to determine your gross versus net income.

2. Plan It Out

Once you know your budget, write out a plan for next year’s finances. Set specific number goals for how much debt you want to pay off or how much you wish to spend on certain purchases. Think about long-term plans like paying off a car, saving for vacation, or remodeling a home.

Consider how you can save more in the coming year by eliminating excess costs. This could be as simple as cutting down the premium coffee run to one day a week and getting an at-home system. If you’re already living paycheck to paycheck like many consumers, cutting costs may involve shopping services to save money or pursuing a side hustle to earn more.

3. Use Digital Tools

Make your budget accessible and user-friendly with an app or digital spreadsheet. Find an easy-to-use financial planning tool to input your personal data and track payments. Some apps are easily sharable to include spouses or partners affected by your budget.

These tools also help you stay up-to-date with changes to your income or fluctuations in monthly bills such as energy costs. They also help you consider your plans when you’re out shopping or away on a trip.

4. Check In Often

The most effective goals are ones you commit to and revisit frequently. Track your numbers and check how you’re progressing toward your plans. Stay accountable by sharing your goals with a trusted source or a financial mentor.

Arrange a time each month to sit down and assess your progress, including loved ones as needed. Even if you’re checking an app regularly, it’s still good to talk through your accomplishments and areas where you’re still falling short of your goals.

Essential New Year’s Financial Goals

After planning a monthly budget, it’s important to also consider the following as part of your financial goals for the new year:

Getting Out of Debt

Making a plan to pay off debt should be a top priority when setting financial goals. Unpaid debts accumulate interest and become unmanageable without a dedicated strategy to eliminate them once and for all. Choosing a debt relief program or attacking balances on your own through methods like debt snowball or avalanche can be the key to ending unwanted costs.

Focus on paying down unsecured debts like medical bills and credit card balances, which typically include higher interest fees. Since secured debts like mortgages can be used to build equity and improve your credit score, continue to make payments on these as part of your monthly budget.

Adding to Your Emergency Fund

Prepare for the unexpected by saving for an emergency fund. Decide how much you can put aside each month to avoid going into debt over sudden life events. Financial planning involves making a secure future for you and your loved ones, and creating an emergency fund is an integral part of this process.

It may help to create a separate savings or other account to house the funds. That way, you’re not tempted to withdraw them from your regular checking account when things get tight.

Saving for Retirement

While in your prime working years, it’s important to plan how much you can save for retirement. Many companies offer matching contributions to a retirement fund that comes right out of your paycheck. Since funding your retirement involves numerous options, it’s a good idea to consult with a certified financial planner to discuss your choices and set up the best plan.

Make an Effective Plan for Getting Out of Debt

Start the new year strong by committing to become debt-free. If you owe $10,000 or more in credit card debt or other unsecured balances like personal loans, partnering with the expert team at TurboDebt can change your financial future.

Backed by over 17,000 5-star reviews, TurboDebt offers debt relief plans to help you reduce and pay off debts faster. Take back your financial freedom and reach your goals without the burden of debt. Contact us today to see if you qualify for our trusted debt relief program.