Now that the New Year 2019 is almost here, I wanted to share with you an article that will help you set your financial goals and start the year on a good note.
You may have set some fitness goals or health goals, but setting financial goals for the year is an important part of your resolutions.
Setting Financial Goals for 2019
Financial goals can range from debt reduction to maximizing retirement savings, and are a great way to establish where you are, and where you’d like to go. Make sure you note what your goals are and set up simple accountability – perhaps a notepad with your progress, or a word document – throughout the year to evaluate your progress.
In light of changes in your income or tax laws, review how much you’re contributing to your retirement accounts.
How much do you contribute to your retirement accounts annually? It’s a good time to review how much you contribute. A good rule of thumb is to continue at least 10-15% of your pre-tax income. The earlier you start the more time you have for growth in your accounts.
Monitor Your Credit Score/Report
Do you know what your credit score is or what claims there may be on your report? It’s a good time to see what is impacting your credit score, such as high debt balances, and set a time every quarter to review.
Track Your Expenses
Keep track of your expenses for three or more months so you can establish a baseline of what you typically spend.
If you know how much you spend on a monthly basis, you’ll be far better equipped to perform two other essential financial goals:
Establish or add to your Emergency fund.
If you’re still working, do you know if you have enough saved for a rainy day? It’s important to have an emergency fund, which should have three to six months’ worth of living expenses. Set a goal to start funding or increase the balance of your emergency fund.
Create and stick to a budget
Now that you have a better understanding of what you spend, setting up a budget – or improving your existing one – will include realistic information. Make sure you analyze your budget monthly to know if you’re meeting those goals.
Manage your debt
Do you know what interest rate you are paying on your debt? Now would be the time to set a goal to pay off those high interest credit cards or debt on assets that depreciate in value, such as a car.
Do you have retirement or investment accounts at many different institutions making it hard to track? Look into consolidating those accounts to one institution in 2019. Consolidating will allow you to better monitor and evaluate the accounts.
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For a summary of the above tips, check out the animation clip below;