No Picture
Economic News

Freshening Your Financial Goals

The end of the year is approaching which means one thing, it’s time to start thinking about your New Year’s Resolutions. Whether you struggled to make ends meet, faced overwhelming credit card debt or the threat of foreclosure this past year, one resolution that should be on everyone’s list is setting new and improved financial goals.
The best way to start off a new year with a fresh start is breaking down your financial goals into smaller, more manageable goals.
Getting A Plan
Research has shown that people who take the time to write down their financial goals are more likely to stick to the plan and accomplish the goal. Making a list of your financial goals for the upcoming new year doesn’t have to include a long list of goals. Instead, pick 5 areas of your financial life that you want to improve such as:
1. Creating a budget — few people actually take the time to write down all of their expenses and properly budget their income each month. There are several online tools available to help you create a budget for your bills and leisure expenses. By keeping track of your money, you will have more money to put towards your remaining goals.
2. Prioritize spending — look at your expenses and prioritize them in order of most to least important. Your rent or mortgage should always be top priority, followed by other essential expenses like utilities and food. By prioritizing your spending on paper, you will be able to identify areas that are non-essential for reduced spending.
3. Paying extra on one or more sources of debt — once you have a better idea about your budget and which expenses are priority, you can begin identifying extra sources of money to use to help pay off your debts. Begin by paying all extra money towards the card with the lowest balance until it is paid off, then do the same for the card with the second lowest balance, and so on. You will be debt free in no time.
4. Not opening any additional credit accounts — make a commitment to yourself not to take out any additional lines of credit for one year. Not only will you have more money in your pocket, but you will be much closer to paying off existing debts by the time you are ready for a new one in 2013.
5. Saving money — saving money is always of high importance but many people simply don’t make it a goal. A good rule of thumb is to have saved enough to cover at least 3 to 6 months worth of your top priority expenses in case of an emergency. And don’t forget about retirement. With so many companies reducing their retirement contributions, it is never too early to start saving for retirement.…