Christmas trees have come down, the tinsel has been put away, and Bing Crosby has sung his last song of the season. The new year is here, and with it comes New Year’s resolutions. As people vow to drop a few pounds, stop bad habits, and start good ones, consider what you can drop, stop, and start to reach your financial goals for 2013.
Of course, you’ll need to set financial goals before you can reach them. Your goals should be realistic and attainable, but also challenging: if you know you can put $100 a month into savings, challenge yourself to save $150 a month. Instead of making occasional donations to ministries and charities, consider regular charitable gift giving.
After establishing goals, decide what you will need to drop, stop, and start to reach them. Dropping services that you don’t use or closing money accounts with high fees will help you maximize your income and investments. If your goal is to lower the principal on debt, perhaps you’ll need to stop using some of your credit cards. Do you want to lower the volatility of your portfolio? Start reviewing your asset allocations on a regular basis and balance them as needed.
Not only will setting challenging but attainable goals help you start the new year off right, but it will also set a strong foundation for the future. Whether you’re trying to add to your retirement savings or further support your favorite charities and ministries, developing healthy financial habits to reach this year’s goals will benefit you in the long run as well; budgeting, saving, and regular review and assessment of your assets, investments, and strategies will help you succeed in the new year and beyond.
Ultimately, my financial resolution for the new year is to aggressively pay down debt and build my emergency fund. Here’s how I plan on doing it:
Drop a few pounds
Financial health might not just affect your finances — it can affect a person physically, spiritually, and emotionally as well. My lax attitude about dining out has lightened my checking account and added a few lbs to the weight scale. By eating out less and making healthier food at home, I should be able to lose a few pounds and save quite a bit of money, too — hopefully enough to put an extra $75 a month towards our emergency fund.
Stop shopping without a plan
My wife and I aren’t very good about making shopping lists — a problem that reared its ugly head this holiday season. We often end up buying more than we need and/or spending more money that we should. So for 2013, we’re going to avoid shopping without knowing exactly what we want and how much we want to spend.
I’ll track the money we spend on groceries and in shops in January and compare it to what we’ve spent at these places in the previous 3 months. We think we can save $125 a month and use that to make extra payments on our student loans.
Start a weekly budget
I have a monthly budget, but my actual numbers rarely match up at the end of each month. The problem is that whenever I need to spend money that is unaccounted for in my budget, I don’t adjust my budget and spending habits to make up for it. With a weekly budget, I can better manage my money and increase the likelihood of reaching my goals.
What are your financial goals for 2013? Let us know in the comments below!