Financial security isn’t something that is reached in one big step. For most people, it’s a series of small goals that add up to something big. The New Year is a great time to set a small financial goal for yourself with a New Year’s resolution.
However, not all financial resolutions are created equal. Vowing to achieve a financial goal that is reasonable for you—and helpful to your wallet—is a resolution worth keeping.
Save X amount of money: Building your savings can prepare you for emergencies, save for a new car or take that vacation you’ve wanted for years, all without having to rely on credit. Whatever your reason for saving, make sure that your goal is reachable. If you want to save $7,000 over the next year, that means putting away $584 each month. Is that something that can fit in to your current budget? If not, you may want to reevaluate your goals, create a longer timeline or even find a way to earn more money.
Save for retirement: Putting more toward your retirement fund is almost always a good idea, because the sooner you save, the more time your money has to grow. However, creating a goal to just “save for retirement” often isn’t effective. It’s easier to accomplish your resolution if you create a specific goal.
Spend less: Spending less money each month is a good way to save more for your big financial goals. Deciding you want to spend less money is a good first step, but how? Take a look at your current expenses to identify what is unnecessary. This may mean cutting out your morning coffee run or seeing one less movie each month.
Pay off debt: Imagine how good you’ll feel if you have fewer bills rolling in each month. By paying off debt, you’ll have accomplished just that. If you’re looking to pay down your debt this year, doing so won’t work with a vague resolution to just pay it off. It will be easier to do so if you have a plan or a specific amount that you’d like to pay toward your debt. This goal may be to pay $2,000 on your loan this year, double your monthly payments or pay your credit card bill in full each month. Specific goals such as these are easier to achieve.
Stick to a budget: Deciding to stick to a budget is easier said than done. You’ll want to define your goals, be realistic about your spending, set priorities and determine your budget. Although it may not be easy to always stick to your budget, getting in the habit now can help you achieve your financial goals and set you on a financially healthy path for life.
If you’re looking for help getting started or planning your financial resolution, Navy Federal offers online financial calculators. By using these tips and setting reasonable goals for the future, you will be thankful you decided to begin your journey to a better financial future now. For more information, click here.