Ok, it’s question time:
- What’s your top financial priority next year?
- Your other goals?
- Your—dare I say—financial resolutions?
Please share your goals in a comment.
I’m obviously writing this around the New Year, but it doesn’t matter when you do this exercise. I mean, there’s nothing special about January 1st, right? How can it be the date when we REALLY ARE going to start hitting the gym, cut back on sugar, and finally pay off that credit card balance?
Although I would argue that there’s nothing magical about the first of the year that’s suddenly going to make developing new habits any easier, taking time to SET GOALS and figuring out HOW TO GET THERE is important. Not as important as, say, actually DOING WHAT IT TAKES, but it’s a first step.
And I think big time frames work especially well for financial goals because it takes so long to see improvements. Cutting out $100 a month of spending to pay down debt hurts immediately, but that debt still hangs around for a long time. I’ve recommended making a five-year financial plan before, but a year works, too.
AN EXERCISE IN GOAL SETTING
Need help setting some goals for next year? Try this. Grab a blank piece of paper and write down the following:
- This year I earned $…. Next year, I will earn $…. In order to make that happen, I need to ….
- Today, I have $… in debt. In a year, I will only be $… in debt. In order to make that happen, I need to ….
- Today, I have $… saved. In a year, I will have $… saved. In order to make that happen, I need to ….
- Finally…I really want to spend my time doing …. In order to make that happen, I need to ….
I’ve written about my own personal goals for several years since starting Money Under 30.
In the early years, it was all about paying off credit card debt, which I finally did in 2009. What a difference a few years makes. In 2010, the freshly debt-free me maxed out retirement accounts, fully funded an emergency fund, bought a house and had a baby.
Today, I’m financially secure, and my financial goals are straightforward: Be able to again max out retirement savings, set aside money in our kids’ 529 plans, and allocate money to give charitably.
It’s a good reminder that no matter how tight things seem, things can change dramatically if you put your mind to it. We tend to overestimate what we can accomplish in six months or a year, but underestimate what we can accomplish in five years.
That’s mine, now share yours! What financial goals do you hope to achieve this year?