With the year coming to a quick end, many people are starting to think about their New Year’s Resolutions. Have you begun to consider your goals in the new year? Specifically, have you set financial goals for 2018?
Everyone is at a different place in their financial journey, but many financial goals look the same.
Everyone wants to make their money work for them, whether they are deep in debt or have millions saved up. No matter where you are financially, these 12 financial goals are worth consideration for the new year.
1) Contribute to an HSA
If you are on a high deductible health plan, an HSA is a huge advantage. An HSA is a health savings account that you can set up if you are on the high deductible health plan. It acts similarly to a regular savings account, except you can only use it for health related expenses.
The best part to an HSA is that you can contribute money pre-tax. And, unlike an FSA, there is no limit to how much money you can roll over from year to year, so you can continue to grow your pre-tax account.
According to the IRS, the 2018 contribution limit is $3,450 towards an individual HSA account, or $6,900 for a family HSA account. Keep in mind, while there is a limit to what you can contribute every year, there is no limit to what you can carry over. Even if you have very few health related expenses now, contributing to an HSA is a worthwhile investment in your future.
2) Stock Your Emergency Fund
Emergency funds can save you from literal financial disaster. An emergency fund includes money set aside for a major, unexpected expense such as a car repair or medical bill.
The size of your emergency fund depends on what you are comfortable with. Enough money to cover 3-6 months of expenses is often suggested, but really, any money you have set aside will only help you.
During a catastrophic emergency, the last thing on your mind should be money. Give yourself the additional security by starting an emergency fund today.
3) Automate Your Finances
Want to save time this year? Make it your goal to automate your finances as much as possible this year.
You can automate your finances by putting your bills on autopay, utilizing a digital budget tracker such as Personal Capital, and developing processes for how you track your income and spending. Taking the time to systematize your finances will help you achieve your goals faster all while spending less time doing tedious financial tasks.
We also have a free automated budget spreadsheet you can download if you prefer to have more control over your data. Many people who try an app like Personal Capital end up going back to a more hands-on option.
4) Pay Off Debt
Becoming completely debt-free may not be something you can accomplish this year, but you can use this year to make a big difference in the amount of debt you carry.
Create a plan to tackle as much debt as you can this year. Declare what amount of debt you would like to pay off in a year and divide that by 12. That amount is how much you need to put towards debt every month.
If that number seems overwhelming, there are things you can do to pay off debt faster, such as cutting back on expenses and working to earn more money through a side hustle.
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5) Donate Your Money
What better goal is there than to give back with your finances this year?
No matter how you may feel about your finances, there is always someone who has it worse. There are many people who have enough money to afford basic necessities, such as food, shelter, or clothing.
Giving away your money not only helps someone in need, but it helps you better understand the value of a dollar. Make it your goal to come up with a giving plan this year to support an organization you care about.
6) Work on Minimalism
Practicing minimalism, or living with less, is a lifestyle change, but it could potentially save you thousands of dollars in the long-run.
You don’t have to be extreme to consider yourself a minimalist, either. You can start practicing minimalism today by selling or donating items in your home that you no longer need or use. You can take time to really consider the value of a purchase before you make it. And you aim to live simply and find joy in life itself versus stuff.
7) Check and Improve Your Credit Score
If you don’t check your credit score as often as you should, this is the year to start.
Checking your credit score and your credit report is one of the best things you can do to protect yourself. You may have heard of some of the credit security breaches that have happened this year. Security breaches like this can happen at anytime, so it’s vital to check your credit report periodically to ensure that no one has tried to steal your identitiy.
You can check your credit score and your credit report for free each year from each credit-reporting bureau.
Now that you have checked your credit score and report, does everything look accurate? Is your score lower than you would like it to be? You can make it your goal to raise your credit score this year.
There are many things you can do to raise your credit score, which you can read about here.
8) Increase Your Retirement Savings
Did you know the average American only has $96,000 saved for retirement, according to Credit Donkey? If you are just beginning to save for retirement, that might seem like a large sum of money. However, the average American will need over $1,000,000 for retirement, so most are not even coming close.
It can be challenging to prioritize saving for retirement when you have debt and other expenses. But failing to save enough for retirement can mean that you might be working every day for the rest of your life. Every dollar you can put towards retirement now can help create wealth.
If saving $1,000,000 seems intimidating, aim to increase the amount you contribute to retirement by a percentage or two of your salary each year. Every dollar is subject to the power of compound interest, so simply saving the money is more than half the battle.
9) Learn More About Money
One of the best goals you can set for yourself this year is to educate yourself about money.
They say knowledge is power, and that is definitely true with regards to your finances. No every piece of financial advice works for everyone. That’s why it is so important to educate yourself so you can make the best decision for your own finances.
Luckily, there are endless resources available to teach you about finances. You can read personal finance blogs for free, order a few personal finance books, or listen to financial podcasts. Many local communities even offer free or cheap financial wellness classes to help you accomplish your financial goals.
10) Cancel Bills
We all know we have a few bills for services or products that we rarely use. Instead of brushing it aside, taking the time to call and cancel these bills, like cable, can save you thousands of dollars this year.
And while there may be some bills you can’t cancel, like car insurance, you can take the time to shop around for a better rate, or call to see if you are eligible for a discount.
11) Set Your Long-Term Goals
After reading this, you likely have set some financial goals for 2018 if you hadn’t already. But make it a goal this year to also consider your long-term goals. What do you want your finances to look like in 3 years? 5 years? 10 years?
All too often, we get caught up in our current goals, but don’t consider how they might be impacting our long-term success. Are your annual goals setting you up to help you accomplish your long-term goals? If not, what do you need to do differently?
12) Earn More Money
Ask yourself this – would it ever hurt you to earn more money? Chances are, no matter what your salary is, you could make use of a little supplemental cash.
Make it your goal to earn more money this year by finding a higher paying job, talking to your boss about a raise, or starting a side hustle to earn additional income outside of work.
Any extra income will only help you to reach your financial goals faster. You can put all of the extra earnings in a separate account and use that amount to pay for other financial goals, such as paying off debt or saving for a big expense.
Related: 100 Goals to Focus on for a Successful Year
How to Set and Achieve Savings Goals
15 Personal Finance Goals to Consider
8 Tips to Achieve Your Financial Goals in the New Year
What are your goals for the new year? Do you have any specific financial goals?
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I’m agree with the enitre post especially poin t 2, 3 and 9…seriously I never had cable and I lived and still living very well:D
I’m looking to add more money to my retirement fund next year. One way that I plan to do that is to find another job that pays more. When that happens, I’ll set my auto withdrawals to the max.
That’s a great goal, Jason! Upping my retirement contributions is also one of my goals this year.
These are all great goals! So excited for 2018!
Thanks, Joe! I hope you’ve had a great new year so far!