Tired of New Year’s resolutions that never stick? Here are five simple, but often overlooked ways to help you succeed with your financial goals in the new year.
Identify Your Target
With the new year, many people set a lofty, but vague resolution to “become healthy”; an immeasurable end that is easily abandoned. For the same reasons, your financial goals need to be specific.
Do you want to pay down credit card debt, start your retirement planning, or create a workable budget in the new year? All of these goals help improve your financial well-being, but the steps to achieve each are different. Knowing the specific financial issue you want to concentrate on will help you create a focused plan for an attainable goal.
Before you go any further, it’s helpful to get organized. Being able to easily access important information, including financial documents, will make financial planning easier.
As an added bonus, once you have all of your documents organized and important information recorded, these files can be easily located by family members in case of an emergency.
For a helpful tool for pulling everything together, check out our Personal Records Organizer.
It’s important to have a goal, but it’s just as important to know where you’re starting from. Many people want to begin budgeting, but they have no idea what they’re spending right now. Others want to start saving for retirement, but don’t know what their investment options are.
To move forward, you need to know your current situation, including a review of your income, expenses and debt. Research your spending history. Find out where and how your money is and could be invested. Having your documents in order, as suggested in step two, will make this process easier.
These basic steps will give you the tools to formulate a successful plan.
Talk About It
When you’re married, finances are a team effort. You may have a financial goal, but if your spouse isn’t on board, then you’ll most likely be spinning your wheels. Financial goals aren’t accomplished alone – you need to work together.
Discussing money can be hard — that’s why we created a product to help you have meaningful and productive conversations with your spouse. For guidance on communicating about money, and many other issues related to finances, check out the Everyday Money Workbook.
After you have a financial plan in place, don’t forget to revisit and review it on a regular basis. Life changes can affect your ability to attain your goals. Be sure to monitor your cash flow, how your investments are performing and figure in any new life developments that will impact your overall finances. Your financial plan is an ongoing process that needs to be revised as needed to remain relevant.
Like any goal, getting your finances in order is rarely achieved with one leap, but in small steps along the way. A mindful approach to money is a great way to start on the path to financial organization!