Three Financial Goals for 2017
Each year, January offers us a fresh start. Often, we spend the first few weeks recovering from all of the extra expenses that the holidays bring, from travel to gifts to holiday events. However, the good news is that you can avoid any feelings of a financial hangover in January 2017 if you make it a point to focus on a few financial goals throughout the year. Here are three goals to work towards this year.
Increase the gap between what you earn and what you spend
Breathing room between paychecks will not only help keep you out of debt, but also allow you to put more money towards your future. First, create enough wiggle room in your budget to cover an emergency expense, even better if you can do so without relying solely on a credit card. Since making this gap between income and expenses as wide as possible should be a priority, you should realize that there are two ways you can increase the difference between what comes in and what goes out – either earn more or spend less. Focus on what is most feasible for you this year. Can you cut some expenses, such as your cable bill or your transportation costs? Or is it easier for you to take on a second job or to work towards a raise at your job? Either way, you’ll be left with more money with which to improve your financial picture each month.
Kill your debt
One of the things you might consider doing with the extra cash you have is to aggressively pay off your debts. You can do this by putting more money towards your bills each month than just what the minimum monthly payment requires. This will allow you to pay down principal much faster and pay less interest overall. Having a lot of debt can hold you back from doing so many other things with your money – from saving to investing to spending it on things you enjoy – so getting rid of it as quickly as possible is never a bad idea. Plus, as you pay down your debt, your monthly minimum payments will shrink, freeing up cash flow for you each month that you can put towards other financial goals, or towards paying down your debt even more quickly.
Ignore the Joneses
One of the quickest ways to get yourself in financial trouble is to compare yourself to others and try to keep up with someone else’s standards. Everyone has different needs, wants and incomes and you shouldn’t let someone else’s desires become yours, especially if you can’t afford them. It’s easier said than done but focusing on what is important to you and what works for your budget will make you much happier in the long run than will buying things just to impress others or giving them the sense that you make more money than you do. Ignore the temptation to “keep up,” whether it comes from your neighbors, television shows, magazines or movies and your wallet will thank you.