The New Year is a great time to make changes to your life for the better, and start fresh. An excellent place to start is by making solid financial resolutions to help get you closer to your money goals. The best way to achieve your financial goals is by defining your objective. The SMART model is an effective guide for defining objectives that are Specific, Measurable, Achievable, Relevant, and Time-based. Vague goals without benchmarks or milestones built in, are too easy to fudge or simply ignore. So hold yourself accountable and set SMART financial goals this New Year.
Here are a five SMART financial goals to consider for 2019:
Earn More Money
Who wouldn’t want to earn more money in 2019? By earning more money, it can allow you to achieve so many other goals. There are many ways to earn more money. Whether it’s focusing on a promotion at your current job, getting a part-time job with your free time, or starting a side job (like freelance writing or design, driving for Uber, etc.)
A goal to earn more money is great, but make it SMART. Be deliberate about how much extra money you would like to make each month and how you plan to do it. Instead of saying you want to earn more money in 2019, say you would like to earn $800 more each month with a part-time job. Once you have a specific goal set, you can work on achieving that goal.
Spend Less Money
This goal may be easier said than done. Be specific as to how you plan to spend less money each month. A great place to start is evaluating what you are currently spending your money on, and assess the areas you can reduce spending or cut out completely. A budget is a great way to assess these areas and provides a clear financial breakdown of your monthly expenses and spending habits. Purchases like eating out, grabbing a coffee to go, or impulsive shopping may be three areas spending can easily be cut. Once you figure out your spending weaknesses, you can start changing your spending habits by determining the amount of money you are willing to cut each month for those impulsive splurges.
Don't have a budget? Here are 6 easy steps to create a realistic budget.
Pay Down Debt
Paying down debt, is a goal for many people. The best way to pay down debt, is to make a list of your liabilities and organize them by the annual interest rate. Those with the highest rate (most likely your credit card debt) should be paid off first. After you have reviewed your budget, set a realistic goal like paying off $400 of credit card debt each month. Focus on paying one debt off at a time while making minimum payments on all other debts. Online bill pay can be a great way to manage debt by setting-up automated payments prior to their due date, and helps avoid late fees.
Stressed about debt? Here are 5 get-out-of-debt-steps to financial freedom.
Save More Money
Saving money is a great goal to have, and can help you accomplish so many other goals like buying a home, purchasing a new car, going on vacation, etc. In order to make saving more money a SMART financial goal, start by looking at your budget. Determine how much you can afford to save each month. Then, put that saving goal into auto drive by automatically transferring money each month to your savings account. After a few monthly automated transfers to your savings account, you’ll no longer notice those dollars but will instead be saving them.
It’s never too early to start investing in your future and retirement. Retirement primarily depends on one essential variable: your lifestyle. How much you spend today and how much you expect to spend in retirement dictates how much you need to save to retire. If you aren’t currently saving for retirement, start now, and start small. If the company you work for offers a 401k plan, find out if they match any contributions. If they do, contribute at least up to the match. By contributing up to the match amount, you are earning as much ‘free money’ as you can. If your company does not offer a 401k plan or you work independently, start a Traditional IRA or Roth IRA.
As we begin 2019, think about your financial goals and putting new habits in place to accomplish these goals. With time, energy and dedication, you can make big strides toward long-term financial security.
“Although no one can go back and make a brand new start, anyone can start from now and make a brand new ending.” – Carl Bard
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