It’s said that writing your goals somewhere guarantees you at least 42% chance to achieve them. Financial experts recommend that you aim for small goals so that they will help you in building up your momentum.
It takes much more than luck to accomplish one’s financial goals. You’ll need to be dedicated, disciplined and have continuous sacrifice. This means that you’ll have to set both short-term and long-term goals and abide by them. Unfortunately, most people struggle with this.
However, research states that having a written list of your financial goals will make you 24% more probable to accomplish them.
Although there are people who get large settlements or win the lottery, the odds are that you’ll be lucky enough to be one of them. Don’t just sit there and wait for financial success to come to you. You still need to be able to afford your children’s tuition, mortgage and have a retirement fund.
Lucius Seneca’s quote was useful in ancient Rome as it is today: “Luck comes as a result of good preparation meeting opportunity.” This means that each and every one of us is responsible for creating our own fortune.
Success opportunities are likely to go to people with financial goals that are realistically set and have clear financial guidance.
18 Useful Financial Goals to Set for The Year
If your main objective is to align your personal finances properly or to have more savings, consider using the personal financial goals provided below. Most of the goals can be used immediately.
1. Create an Emergency Fund.
Having a financial goal would be useless if you don’t begin by setting aside some money for emergencies. Since its impossible to tell what might happen in future, it advisable to have a little cash set aside at all times.
According to Megan Robinson, a certified money coach, emergency funds are “savings accounts that are created specially to cater for any unplanned emergency situations.”
Most financial gurus recommend that you set aside money equivalent to 3 months’ worth of your regular expenses in a different online high-interest savings account. Don’t allow an unanticipated expense destroy your healthy financial plan.
2. Boost Your Low Credit Score
Improving a low credit score is one of the most vital things to accomplish on this financial goal’s list. Although it seems difficult to accomplish, it’s not and this is a long-term financial goal which takes time to accomplish.
First step is to look at your credit score for free. Knowing where you are and what’s affecting your credit score will help you work on improving it. The following 4 aspects will help you to raise your credit score fast:
- Pay off a huge percentage of a loan or credit card balance so that the utilization ration (UR) can be reduced.
- Request for a limit raise – unexpectedly, doing this will also help in reducing the UR.
- Rectify any report mistakes – the FTC says that at least 20% of credit reports have faults in them.
- Join a different cardholder’s existing account (it will help you to further cut the UR, plus the other person’s score can boost yours).
3. Look for a Side Hustle
In a study conducted in 2019, 57% of Americans stated that they had a side hustle – and 36% of them were making up to $500 every month from them. This is a good amount which can help reduce a large portion of an average American’s monthly bills.
Before you select your side hustle, consider the amount of cash you’re hoping to make and how much time you’re going to commit. Having a side hustle that helps to earn some extra cash for your expenditure is a different thing from having one which will eventually grow and substitute your current income.
If all you’re looking to achieve is earn a little extra cash for a short time, then get a side gig that will assist you in making money quickly.
4. Read Personal Finance Books
Make a habit of reading some highly recommended personal finance goal as a short-term goal. If you’re not an avid reader, you can instead opt for personal financial podcasts. Like they say, “Knowledge is power”.
5. Automate Your Investing
Since we’re in the 21 st century, technology is everything. Easy to use smartphone apps such as Stash or Acorns (currently offering new members a free $5 signing bonus) are entirely automated and assist people in taking care of their saving and investing.
For much robust alternatives, look at this list of the best investment apps.
6. Be Health-focused
The CMS.gov states that in 2017, the average American used $10,739 on healthcare. This is quite a large amount of cash to spend in order to maintain great health. Living a healthy lifestyle will help in reducing healthcare expenses and at the same time ensures that you’re in great shape.
If you’re hoping to shed some extra pounds check out HealthyWage, a site that helps its members lose weight at small fee. The only drawback is that users will owe the firm when they don’t achieve the set health goals. If you’re looking for some extra motivation, you can win up to 10,000.
Related: Millionable’s HealthyWage Review
7. Get Out of Debt
One of the most important steps is to get out of debt. This doesn’t make all the other steps on this list of financial goals less important, but having debt could be very detrimental when it comes to trying to attain financial independence.
Avoid being a victim of the vicious loop of accrued interest and minimum payments. Not paying your bills will only make it difficult to eliminate them – and even worse, be damaging to your credit score.
Good Financial Cents certified financial planner Jeff Rose listed a several simple reasons for doing away with debt:
- Doing away with debt means that you’re regaining complete control over your income
- Being debt free ensures that you have more cash for investments and savings, and even a lot more for expenditure
- It makes it easy for you to quit a job you’re not fond of
- It frees your mind from the stress and worry which is attached to having debt
8. Keep Accurate Records
Since writing your goals gives you a 42% higher chance of accomplishing them, it means that tracking your expenditure keenly gives you a greater sense of accountability. Making a money journal of some kind is a great way to track your previous successes (as well as failures), identify areas that require improvement and learn from previous errors.
Also, keeping track of your goals will be a simple task to accomplish since you’ll get reference points as well as objective data that you can draw conclusions from.
9. Create (and adhere to) a Budget
In reference to a current Gallup poll, at least 32% of people have tried to make a budget. What is preventing the remaining 68% from doing so?
Setting aside some time to put your expenditure into categories can be very helpful. The ideal budgeting guide follows the 50/20/30 rule. This plan states that 50% of your normal income is to be used for essential expenditure (utilities, transportation, rent); 20% to be put towards your personal financial goals (paying off debts or savings); and 30% is for flexibility (for month-to-month expenses that vary such as groceries, gas, eating out, shopping, entertainment or hobbies).
10. Avoid Large, Unnecessary Purchases
Stop making expensive, unnecessary expenses. For example, be open to using your old iPhone instead of purchasing the one that is currently in the market. Know the things that are most important and do away with the rest to avoid increasing your debt charges. Refraining from a “want” that isn’t really a “need” can be quite difficult, although this is the kind of discipline you need in order to change your financial situation.
11. Save on Utilities
Just other people are spending their money on utilities, it doesn’t necessarily mean that your utilities should cost a large amount of money.
Find ways in which you can save on electricity by cutting down on your cooling and heating costs. Minimize your cable expenses by doing away with the paid channels that you don’t use frequently such as sports packages or HBO.
If you’d like to avoid using a lot of time to negotiate you bills, opt for services like Trim to help you handle them. Once your account is linked to the Trim app, it will assist you in tracking your expenditures, negotiate your internet and cable bills, cancel all unutilized subscriptions etc.
Related: DollaSprout’s Trim Review
12. Learn a New Skill
You cannot change negative circumstances by accepting the situation. It can only happen if you really want change. One of the most useful way to achieve this is to learn a new skill so that you can have more opportunities.
Improve on your current job skills or try out an entirely different area of expertise. There are different opportunities of learning a different skill from home while still handling your current job. However, it may take a lot of time to accomplish and will need you to be hard working, but in the end it will be worth it.
A Proofread Anywhere employee, Caitlin Pyle earned more that $43,000 from working as a freelance proofreader during her free time. She was also able to go on vacations because she had enough time and money.
After sometime working as a freelance proofreader, she decided to teach other people about the field of work by starting up Proofread Anywhere. For more information about Caitlin and her journey as a freelance proofreader, check out her story on how to get started as a proofreader.
13. Set Up Appropriate Overdraft Protection
Getting an over draft will lead you to pay a fine, which is a very reckless thing to happen to you. You can avoid this by visiting your bank and linking all your checking and savings accounts which will add you a little support when things are pretty tight.
14. Set a Loan in Repayment to Autopay
Financial automation is a very useful thing, and it doesn’t make any errors. It ensures that the human (based on emotions) side of money attachment in general and functions through objective efficiency.
Lenders ten to provide loans with reduced interest rates just because you opted for auto-pay. Instead of writing a check to the bank for a loan payment every month, it will be deducted automatically from the linked savings or checking account.
15. Automate Your Savings
Most employers provide their employees with the option of dividing direct payments into different accounts.
Make a budget and determine how much money will go to your savings account, then instruct human resources to allocate a given percentage of all your paychecks to a savings account that is high-yielding but is different from your regular spending account.
Not being able to access the money ensures that you’re not tempted to spend unnecessarily.
16. Set Your Bills to Autopay
A great way of saving money, time and hassle is to set your bill son auto-pay. However, you’ll need to have a suitable budget that can accommodate it so that it can be put into place.
This means that threatening utilities will no longer be able to cut services short because of misplaced payments, plus you won’t have any credit hits because you forgot to cater for your monthly credit bills. The best part is your mind will be at peace because you’ll be certain that all your bills are paid on time.
You need at least one hour to set this up and you’ll be saved from a lifetime of headaches. And because most companies set incentives to help their customers with auto-pay by advertising discounts and reduced rates. It would be best to go for it and get a discount for using automated payments.
17. Eliminate Expensive Habits
Gambling, tobacco, alcohol and firearms are some of the things that most of us cannot avoid. All of them are addictive to a certain degree and are quite expensive (according to the ATF there are at least 8.1 guns in an average American household).
Some surprising figures:
- An average adult uses at least $500 on alcohol per year.
- An average smoker uses up to $2,000 (over $5,000 if you’re in New York) yearly on cigarettes.
- Households in America use an average of $162 on lotteries per year, households with low incomes spend at least $289 and people who earning less than $10,000 spend $597 or almost 6% of their earnings per year.
If your earnings seem to be vanishing at a very fast rate, begin your budgeting journey with this category and see what you need to do away with.
18. Get More Organized
Utilize tools such as organized finances and Personal Capital track as well as personal finance with the most advanced technology. Using the Personal Capital dashboard, get a detailed outlook of each of your accounts. This can be coupled with financial planning services and professional advice.
A great advantage of using a budgeting tool is it offers you with a nice overview of your personal financial health. From fee elimination to net worth tracking to planning for your retirement, achieving one’s goals becomes very easy to handle by logging into all your accounts.
The most vital thing when it comes to financial planning is:
Writing down your financial goals increases your chances of achieving them by 42%. Drafting your financial goals is the right track to achieving a successful financial life. Instead of wishing that you had better finances, take action and plan for them by setting the right kind of financial goals.