I’ve been thinking a lot about New Years and that magical, fresh start feeling that many of us are feeling these final days of December. This is a time when I tend to get reflective and spend time thinking about the upcoming year. I imagine most of us are doing the same and I wanted to pop into your thoughts just before you make that list in hopes to get you to consider shifting your mindset to something different this year – financial goals!
New Year, new financial goals! I’m sharing my on-going financial goals and steps to achieving financial freedom. And yes I’m definitely dropping the B word before the end of this post. Sorry-not-sorry but It’s important and honestly everyone needs one in their life. Yep, you need a BUDGET 😉
Here’s a few of my annual financial goals:
Table of Contents
Save More!
If the Corona lockdown taught me anything it was that I needed to improve my savings. At the time of the lockdown I was living paycheck-to-paycheck during a time when people were hoarding. Living paycheck-to-paycheck meant I couldn’t buy in bulk and I was at the mercy of whatever was remaining on the shelves. Several ways I save money:
- Cut back on unnecessary spending
- Set-up automatic transfer into a savings account (out of sight, out of mind)
- Increased 401(K) contributions
- Use a credit card with cash back, points or miles that can be used to offset future purchases
Improve My Credit Score
I hate to admit this but my credit was less than stellar 3 years ago. Thankfully, I’ve since raised my credit score out of the bad zone. It’s not where I want it to be but it’s a work in progress and there’s definitely progress. It makes me giddy knowing I pulled myself out from bad to good and seeing excellent on the horizon. Here are 4 ways I continue to raise my credit score and you can too:
- Paying my bills on-time
- Focusing on paying down bills
- Paying off bills
- Eliminate unnecessary spending and never use credit unless I have the money on hand to pay it off.
Say “No” to New Credit Cards
As enticing some offers can be – like that Amazon one that seems to pay for your entire first purchase…I still say NO! I don’t want anymore debt. I’m working to be debt-free and I won’t get there by opening a card every time retailers flash a “deal” in my face. In addition each credit card application grants the card issuer permission to pull from your credit score. Since one of my goals is to RAISE my credit score applying for a credit card is counterproductive. My other goal is to become debt-free and having another credit card in my wallet is basically setting myself up to get INTO debt and for that reason – it’s a hard NO for me.
Tip: Know your limits and your weaknesses and act accordingly to counteract them.
Create a Home Cash Flow & Budget
I told you I would be dropping the B word before the end of this post, lol! But, seriously – this one is huge! Budgeting is the most important thing you can do to be financially successful. There are people making six figures struggling financially because they don’t manage their money well.
Creating a budget isn’t restrictive nor does it mean walking around with excel sheets constantly. When you create a budget you create a plan for your money. Think of it as putting your money to work for you, not the other way around. But before I created my budget I did some tracking.
Tracking my spending (aka cash flow) has helped me understand where my money was going each month. It showed me where I was spending most my money and areas that I needed to cut back my spending to fit my budget. Figuring out your budget is simple. Write down all your fixed expenses (rent, mortgage, cell phone, groceries, car, insurances. etc). Once all your expenses have been identified, deduct them from your income. This will show you exactly how much you have for flexible expenses like eating out.
Tip: Credit cards and even some bank cards will graph your spending by categories. This comes in handy identifying where your money is going. This will help you understand and change your spending habits.
This can be intimidating, but don’t let that be the reason you don’t do it. Tracking your income and expenses helps you differentiate between things you want and things you need and that can lead to a change in spending habits. You can create a budget with a budgeting app or a simple excel sheet.
I can always share my Excel sheet if you need one. Just email me and I’ll send it right to your inbox!
Fresh Starts aren’t Just for January 1st
If by chance you are reading this long after January and think you need to wait till next January – STOP! Fresh starts are all around us. You can start next Monday or tomorrow. You can also start in a couples hours or a couple seconds. Just put all that January 1st energy into any given moment. The good news is that any new moment can be filled with January 1st vibes if you allow it! It’s your energy and your choice. You don’t have to wait for a day on a calendar to start fresh. If you need to start fresh then give yourself the gift of starting fresh when you need it and not when some calendar says so.
My Hopes for You
I hope that this post inspires you to put some of that fresh start energy in implementing some financial goals in your life.
It’s okay to feel a little overwhelmed about your current financial situation but don’t stay there friend! You have the choice to do something to change your situation. Make the choice today to work towards financial freedom. It may not happen overnight (actually it won’t happen overnight) but if you create a realistic plan and stick to it – you’ll get there! By the way this is coming from the girl doing it herself in real time. The girl who was once drowning in debt and living paycheck-to-paycheck to the girl today who has a savings, retirement funds, a rising credit score and has paid off 80% of her debt over the span of 3 years. I don’t say this to brag. I say this to show you its possible if you stick with it.
I’m rooting for you!
1 thought on “Financial Goals for Beginners in the New Year”