When reflecting on the past year and setting New Year’s Resolutions, what was your biggest regret? Like over two-thirds of Americans, you probably have some financial regrets. Whether you didn’t save as much as you had hoped or you didn’t pay down your debt, you probably didn’t quite reach your goal for 2018.
The New Year is about setting new goals and learning from the prior year’s mistakes. So rather than creating a resolution to save money or pay down debt, it’s time to make financial wellness your New Years’ Resolution. Much like how overall wellness is about balance and knowing what you need physically, spiritually, and mentally, financial wellness is understanding your financial situation and following behaviors that help your current and long term monetary goals.
Keeping New Year’s Resolutions can be hard, but with these six steps you can prepare yourself for a year of successful financial wellness.
Goals are more easily achieved when you have a specific target. For example, if you want to save for your dream vacation, determine the cost of the trip and a deadline. If you set specific goals, you can benchmark your success without a problem. (Remember: It is important to remember to make your goal achievable and to consider all your expenses).
Design a road map to success. Rather than saying you wish to save $10,000 this year for retirement, decide how you will achieve this goal. When producing a budget for the year, start with a monthly goal. First, subtract your monthly expenses from your income. Then, decide how much of your remaining income you need to save from each paycheck to reach your overall objective.
Make a spreadsheet to track your income and expenses to ensure you are sticking to your budget. Don’t wait for the credit card statement to come in the mail— track each transaction throughout the month. By watching what you spend, as you spend it, you can accurately evaluate if you are within your budget and make adjustments as needed.
It may be convenient to stop for coffee on your way to work, or order takeout when you don’t feel like cooking, but these little luxuries add up and could be costing you hundreds a month. We aren’t saying you can’t treat yourself every once in a while, but set a limit on how much you can spend on these unnecessary expenses. You may be surprised at how much money is left at the end of the month, when you make a few small sacrifices.
Often we hear, “I don’t have the money to be investing,” but you don’t have to invest thousands of dollars each year. You can start your investments with as little as $20 a month, because by the end of the year that is $240. It’s called micro investing, and it makes it easy for you to start investing small amounts now that will grow overtime, making you more money in the future.
Financial wellness is all about long-term goals and planning. When setting your long-term goals, think about future spending scenarios; answer questions like, “do I plan on having children?”, “when will I need to purchase a new car?”, “when will my mortgage be paid off?”, “how close is retirement?” Addressing these questions will help you determine your long -term goals and plan for a financially fit future.
As you start thinking about your resolution for 2019, these six steps can help ensure you will reach your financial goals for 2019.
At Duncan Financial Group, we understand money matters and your money matters to you, that is why we offer services that work together to assist you on your journey to financial wellness. For support in achieving your goals this year contact us at (724) 863-3420. We can walk you through the steps and ensure you have the financial plan that fits your needs.