The information in this article is up to date through tax year 2019 (taxes filed in 2020).
As the new year starts, it’s time to start planning goals. Here are some financial goals you can set for yourself for a better financial future.
Create a monthly budget
Manage your spending and saving with a plan. Then, stick to it. This will allow you to see exactly what you are spending money on, where you can cut back, and have a little extra cash to spend or save.
Put money into savings
- Invest 50% more into your investment account than last year. Want to secure your future? Try investing more this year than last year if you are able.
- Save for a new big-ticket item you have been debating. A laptop, a car, or even a house are good financial goals that take time and planning to afford for most people. Manage your finances so you can save up for them a little at a time. See how much you need to set aside each month to meet your goal by a certain date and then stick with it.
- Start saving for your children’s college expenses. College is expensive, and even with scholarships, you might still be responsible for things like car payments, room and board, and other living expenses. Make sure you are prepared well in advance.
Enroll in your company’s 401(k) program
It’s an easy way to save for retirement and takes little effort on your part. The amount is usually automatically withheld from your paycheck. Or open an IRA.
Pay down debt
Whether you have student loans, a bigger car payment than you’d like, or credit card debt, pay double or triple payments to reduce the amount of interest you’re paying. And you’ll be out of debt faster which will give you more financial freedom.
Create an emergency fund
Financial experts recommend having enough money in savings to cover 3 months of expenses in case you lose your job, have difficulty finding work, or incur unexpected expenses like high medical bills.
Improve your credit score
If you’re starting off this year with a poor credit score, follow these steps to improve it:
- Pay your bills on time.
- Pay down your balance on your credit card.
- Only open new credit accounts if needed. Try to keep your accounts to a minimum.
- Pay off any debt. You don’t have to pay it all at once, but the more consistently you pay, the better your credit score will get.
Start a small business
The only thing better than one source of income is two. If you anticipate extra expenses this year or want a source of income solely for retirement, a side gig is one of the most popular options. Even if it is a big investment up front, the extra cash flow will help you to achieve some of your other goals if you can’t reach them with your regular income.