3 Realistic Money Goals for the New Year

With the turning over of the New Year, financial resolutions are almost as common as health-related resolutions. Everyone wants to lose that weight. Everyone wants to get financially secure. For most of us these resolutions are as annual and regular as the holidays. This is the year, however, for you to break that cycle of futility! I’m giving you 3 achievable, realistic and totally “Hey I can do that!” money goals. Also, these money goals are easily measurable so that you can reap the reward and be propelled by the moment of your success!

1. Your first goal is to get $500 in a savings account. I know what you are thinking and you shouldn’t use those words even in your mind! But listen without a savings account, you don’t have a spending plan. The two go hand in hand. As of November 2017, the savings rate in the United States had dipped to 6%, the lowest rate of the year. I’m sure you have heard many lectures on savings before so I’ll spare you another one here. Part of the problem is financial planners tell everyone they should have 3 to 6 months worth of living expenses in savings. So if you have relatively low expenses of $2000 a month you need to come up with $6000 to $12000. Nope! The numbers are too intimidating so you don’t even start. It is also likely you have heard financial talkers tell you to establish a savings account with a $1000 but when you are struggling that too can be out of reach. $500 is a realistic savings amount. Remember, this is money you can get at when you need it. Take the first and most important step. Set up a direct deposit with your employer for $25 (more if you can handle it) per pay to be direct deposited into your savings. The direct deposit isn’t optional. Without it you will not consistently contribute to your savings. Without a savings, how will you pay for a new water pump in your car? How will you replace your hot water heater when you have no money in the bank? How about the 4 bald tires on your car? The bottom line is a savings account is essential, not optional, to improving your finances. Without it, you will borrow money or go without paying a bill. Take this opportunity to setup your direct deposit into a savings account today. First goal of the year achieved!
2. Reduce the amounts you pay on at least 2 monthly bills. Do you pay utility bills? How about mobile phone bills? Cable and internet bills? During the year life takes up a lot of our time. We drag ourselves out of bed and into work. Family obligations or the gym or both might be right after work. By the time you get dinner on the table your head is lolling to side you are so tired! Our days are full but if you make time, you will be able to reduce your bills. Go through your bank statement. How much did you spend on food last month? Did you eat out or prepare you meals at home? If you largely eat at home, good for you! Did you meal plan? I bet you can easily reduce your food expenses. Have you cut the cord on the cable company yet? What are you waiting for? Now is your opportunity to save by going to one of the many streaming services that are reliable and in most cases a better buy than cable. What mobile phone carrier do you have? Have you talked about switching carriers for a long time but never made the jump? Now is the time! There are many discount carriers with unlimited plans at a much lower price. Last year at this time, I switched from a major cell phone network to a discount network. I now have 5 lines of unlimited data for $125 a month. There has been no drop off in service and I couldn’t be happier as this cut my bill in half! Look at your bills, you will find at least two areas where you can make reductions.
3. Calculate your net worth twice a year. There is an assumption that net worth statements are only for the wealthy. This is not true. Net worth is a tool you will use to determine how your finances are trending and ensure that you are being financially healthy. Here is a free net worth statement. Net worth is simply your liabilities subtracted from your assets. Even if you start with a negative net worth where you owe more in credit then the value of your assets, you can improve your net worth. You can pay down unsecured debts while building your savings. Grow your net worth each month and you can celebrate your progress. If your net worth hasn’t grown, evaluate why. Make changes and get it growing again. Net worth is as essential to your personal finances as your budget. It allows you to monitor progress and alert you to potential problems before they get out of hand.

Take the time put these money goals in action. I know these money goals are very achievable no matter your current financial situation. More importantly, they will insure that your personal finances will be trending up and in a better position come this time next year.