After all of the New Year’s Eve festivities wind down and midnight strikes the clock, it’s officially 2019, and like most people, you probably want to set a resolution that you can achieve in the next 365 days. Some people focus on their physical health and opt to make weight loss and a better diet their resolution while others plan to find their dream job or cross a few destinations off of their travel bucket list.
While these are all great solutions, a new year is also a great time to set financial goals. By taking charge of your finances, you can pay off debt, save more money, and increase your overall financial standing.
Here are 5 financial goals that you can accomplish in 2019.
1. Create a Budget & Stick with It
Creating a budget is a simple yet highly effective way to achieve financial success and freedom. Yet studies have found that only 1 in 3 households use a budget to keep track of their finances in an organized way. Budgeting is a great way to devise a plan on how you will spend and save your monthly income. By budgeting, you can ensure you have enough money to pay for bills while also having money left over to put into a savings account or to spend.
The good news is that in today’s digital world, budgeting is extremely easy. In fact, there are all sorts of budgeting and financial apps available to make managing your money a breeze. Top apps include:
- You Need a Budget
After ringing in 2019, open your app store and download one of these tools. Budgeting and money management is much easier when you’ve got a trusted app to help you along.
2. Pay off Debt
Getting into debt is easy, but getting out of debt can feel like a never-ending uphill battle. Start the New Year by making a resolution to manage your finances and Get out of Debt. No matter if you’re in $5k worth of debt or $50k, it’s never too late or too soon to start chipping away at that number. Begin the new year by having a plan to reduce the amount of money you owe creditors.
To start, make a list of your debt, to include how much you owe and to who you owe. Using the list you can determine which debt to tackle first. Some people prefer to pay off their highest-interest-rate debt first while others pay off the lowest amount of debt, known as the snowballing method.
No matter how you decide to pay off your debt, the important part going into 2019 is that you have a plan to pay down and pay off debt. Even if you don’t end the year entirely debt free, reducing your debt load is a huge accomplishment.
3. Save More Money
How much money do you have in savings? If you’re ashamed of the answer, you aren’t alone. A 2016 study found that 35% of U.S. adults only have hundreds of dollars in their savings accounts while 34% have nothing saved.
Having and continuously funding a savings account is beneficial in many ways. A financial emergency can happen at any time. Wouldn’t it be ideal to have money set aside for car repairs instead of charging a credit card? Financial emergencies shouldn’t put you into debt.
Savings accounts are also beneficial in that you can start and continue good financial habits early on. By putting money into your savings account each paycheck, you can get into the habit of saving and have peace of mind that you have money available to use outside of your checking account.
4. Build an Emergency Fund
Similarly to savings accounts, people rarely also have an emergency fund. An emergency fund can be seen as a secondary savings account. With an emergency fund, you can use your savings account to save for an upcoming vacation or to pay for a large expense. On the other hand, the emergency fund is used strictly for emergencies such as:
- Car repairs
- Appliance repair or replacement
- Medical emergencies
Because financial emergencies can truly happen at any time, having an emergency fund allows you to have money to fall back on during a rough patch. Emergency funds are also beneficial in the event that you lose your job or are unable to work.
In 2019, make it your resolution to build an emergency fund that can pay all of your expenses for at least three months. Happy saving!
5. Start Saving for Retirement
No one wants to work for the rest of their lives, yet it seems so many people, especially younger generations, are opposed to saving for retirement. Most Americans have less than $1,000 saved while half of all adults in the U.S. have nothing set aside for retirement.
To get the most bang for your retirement buck, utilize any retirement benefits that your company offers, such as an IRA with company matching. Even if you can only contribute 3% of your paycheck or $50 a month, setting aside something for retirement is better than nothing! Plus you can enjoy the various tax benefits of saving for retirement early on in life.
With the New Year right around the corner, now is the time to start thinking of what you want to accomplish in 2019. If financial security sounds good to you, try achieving one of these five financial goals.