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Setting Financial Goals for the New Year

The new year is all about dreaming of new beginnings and setting health, career, and personal goals. Whether you are looking to become healthier and stronger, working to earn a big promotion at work, or trying to get more organized, 2017 brings opportunities for personal growth in many aspects of life. However, when writing your resolutions for the new year, make sure you are not overlooking one extremely important element — your finances.

Setting short-term, intermediate, and long-term financial goals are essential to taking control of your money and achieving the life you have envisioned for yourself. If you have yet to set any financial goals, now is the perfect time to start. Here are a few things to consider while getting started:

Think About Your Future

Do you remember tirelessly working toward your college degree one semester at a time? The end felt so far away, but every semester you got a little bit closer until you finally graduated and accomplished your goals. You had a clear end goal, and you did what you had to do to make it happen. Financial goals work like this, too — you do not want to blindly set goals without thinking about your end goals.

Before setting your goals, start to consider your “vision” for your future. Where do you see yourself in five years? In ten? Maybe you envision yourself buying a home, investing in a rental property, getting out of debt, establishing secure savings, going back to school, or having children. What would make you feel happy and fulfilled? Creating an overarching vision for your life and remembering your reasoning behind your goals will help you be more motivated to achieve them because you will know exactly what you are working toward.

Put Your Vision on a Timeline

Consider where you are right now in relation to where you want to be. Think about all the milestones that will get you to where you want to be in life. Organize these goals into three categories depending on where you are at this point in your life — short-term, intermediate (or mid-term), and long-term.

Short-term goals are things you want to accomplish within one year, like creating a budget that works for you, paying off credit card debt, or establishing an emergency fund.

Intermediate (or mid-term) goals could include financing a wedding, purchasing a home, or paying down education loans.

Long-term goals are goals that are meant to be accomplished years down the line, like establishing an adequate retirement fund. Considering all of your financial goals and which category they fall into will help you with the next step.

Prioritize Your Goals

Once you have established your goals and determined whether they are short-term, intermediate, or long-term, you will need to prioritize them. Typically, you will want to start with your short-term goals. For example, if your short-term goals include eliminating your credit card debt and creating a solid emergency fund, you will need to decide which is most important for you to accomplish first. Focusing on one or two goals at a time and accomplishing them before moving on to the next will help you to stay organized and on track. Plus, it feels great to check something off your list!

Make 2017 the First Step to Financial Stability

As Bill Copeland once said, “The trouble with not having a goal is that you can spend your life running up and down the field and never score.” Without setting clear goals, there is nothing specific to work toward and less satisfaction from your accomplishments. When you are mapping out your annual goals this January, do not forget about the financial part of your life. Make 2017 the year you start to take control of your finances and realize your dreams.

If one of your goals is to pay down student loan debt, ELFI may be able to help. You could qualify for one single payment with potentially lower payments or interest rates, thereby helping you free up money in your budget to accomplish other financial goals more quickly!

Vacation Ideas That Won’t Break the Bank

Taking time off from work to unwind is important. Around three-quarters of workers report being stressed at work, yet nearly 40 percent of Americans do not plan to use all of their allotted paid vacation time this year. Studies have shown that taking vacation time is good for your body — it can help reduce stress, maximize productivity, and improve quality of sleep, among other benefits. So why are Americans not taking vacations more frequently? To some, vacations are viewed as a luxury, and elaborate travel plans are simply not in the budget. However, taking some vacation time does not have to involve spending all of your savings. Here are a few vacation ideas for budget-friendly relaxing:

Find a Great Deal on a Cruise

Traveling to exotic islands might sound costly, but if you are dreaming of a relaxing beach trip for your next vacation, a cruise may be the way to go. If you play your cards right, there are many ways to score a great deal on a cruise. Be flexible about dates when booking your cruise — if you are able to go during the off-season months (January, May, November, and early December), you can save hundreds. To save even more cash, book very early or very late — cruise lines often offer discounts to early bookers as well as to last-minute bookers in order to fill up the remaining staterooms. To ensure you are getting the absolute best price, try using a website like Cruise Compete to compare deals from multiple cruise lines. Another appealing characteristic of cruises is that food, basic drinks, and even room service are often included in the price of the cruise. So, apart from gratuities and optional beverages, you will not have much to pay for once you board the ship.

Travel to Your Dream City

If you plan strategically, there are plenty of ways to cut costs on a big city vacation. If you are within a reasonable driving distance of your destination, consider carpooling or even taking public transportation like the Megabus to save on transportation. If driving is not an option for you, you can use a website like Kayak to compare flight prices to make sure you are getting the best deal. If you are not picky in regards to which city you want to visit, try Kayak Explore — you simply plug in variables like airports, dates during which you want to travel, and the amount of money you want to spend on airfare, and it shows you everywhere in the country (and even the world) that you can travel based on your preferences. As for places to stay, Airbnb or local hostels are often a cheaper alternative to hotels. Once in the city, choose affordable activities to fill your day — many large cities have museums that offer free admission.

Visit a National Park

With the National Parks Service (NPS) celebrating its 100th birthday this year, now is the perfect time to visit one (or multiple!) of our own national treasures. There are 58 national parks scattered across the country, so the odds are favorable that there is one within driving proximity to you. Fortunately, entrance to the parks are inexpensive (typically running from free to around $30) — and the NPS offers several free entrance days throughout the year. For the best deal on visiting multiple national parks (or the same one multiple times) in a year, consider purchasing the America the Beautiful Pass — an $80 pass that permits a personal vehicle and all of its passengers admittance into over 2,000 federal recreation sites, including: national parks, national wildlife refuges, standard amenity fees (day use fees) at national forests and grasslands, and at lands managed by the Bureau of Land Management, Bureau of Reclamation, and U.S. Army Corps of Engineers. As for overnight stays, national parks charge a small fee per night for tent and RV camping, and in certain national parks, you can find hotels within or just outside of the park.

Plan a “Stay-cation”

The least expensive option of the four, a “stay-cation” can give you a vacation from work without spending much (or any) money. Taking some time off to simply relax in your own home or explore your own town can leave you rested and rejuvenated for the beginning of your next work week. Whether you go see a movie, make a delicious new recipe, get a massage, find a new project to DIY on Pinterest, go to a local event, visit a local tourist attraction you’ve never seen, or just binge-watch Netflix all day, taking the time to do some of your favorite things can feel like a vacation in itself.

Vacations That Won’t Bust Your Budget

Even if you are on a budget, you deserve a vacation every now and then. Whether you are cruising around the Caribbean or surfing the web on your couch, taking vacation time has many health benefits. If you are looking to free up some extra cash for your next vacation, see how much you could save by refinancing your education loans. Want more inspiration for budget-friendly vacations? Check out our Pinterest board!

6 Financially Savvy Ways to Use Your Federal Tax Refund

The tax season is soon approaching, and if the federal tax refund figures are similar to 2016, over 100 million U.S. residents could see a tax refund! In fact, according to the IRS’s figures compiled after the late filing deadline in October 2016, the average total refund was $2,777 — a 1.8% increase from 2015. We have our fingers crossed that those amounts keep rising! If you are lucky enough to receive a tax refund, there are undoubtedly some exciting ways to use it — vacations, shopping sprees, and more. However, you may want to explore more financially prudent avenues to put your tax refund dollars to work. To help guide you, here are our top 6 financially responsible ways to use your tax refund dollars:

  1. Make a Larger Payment on Your Student Loans or Other Debt

Use your extra funds to pay off or pay down any outstanding student loans or other debts like credit cards, car loans, or home mortgages. Doing so can reduce the total amount of interest you pay over the life of your loan(s). For the most effective repayment plan, focus your efforts on the loan(s) with the highest interest rates. However, before you start committing extra funds to one particular loan, find out if you can refinance and consolidate any of them — such as student loans and home mortgages – into a new loan package that offers more favorable rates. If you do this ahead of time, you will know exactly which loan(s) will continue to have the highest interest rate(s) and where to focus your extra tax refund dollars.

  1. Create a Savings Account/Emergency Fund

Most financial experts suggest saving at least six months’ worth of your monthly expenses as an emergency fund. For example, if you need $4,000 a month to pay for your living expense bills and to buy food, then you will need to have at least $24,000 in your savings account. These funds can come in handy during a period of unemployment or other financially challenging moments in life. If that amount seems too far out of reach, start with a modest initial emergency savings goal of $1,000, which should cover many basic car or home repair costs and help you avoid accumulating additional debt. You can read more about budgeting strategies and percentages on Investopedia. Need more help creating a budget? Check out our blog, “Creating a Monthly Budget,” as well as other related topics on the Education Loan Finance blog.

  1. Set Up a Retirement Account

Next, consider saving for your future — that is, your retirement account. Creating a Roth account, whether it is a traditional or Roth IRA, contributing to a 401(k), or setting aside funds in some other retirement plan is a great way to ensure that you will be financially comfortable later in life. Most financial experts suggest setting aside 20 percent of your income towards your retirement.

  1. Start Investing

If you already have a great plan in place for savings, retirement, and financial emergencies, then you might want to consider using your tax refund dollars for other financial goals, like investments. That way you can earn additional income that ideally earns more than your savings account. Want some investing tips? Try starting with these financial gurus.

  1. Donate to a Charity

Charitable giving is a great way to use your federal tax refund dollars in a profound way. The financially savvy benefit? If you play your cards right and make a tax-deductible donation to an eligible organization, you may be able to write off your charitable contribution on your tax returns. Not only could you help increase the amount of your tax refund, but you will likely feel great about giving to a deserving cause. 

  1. Invest in Yourself

We call this worthy section a personal investment in yourself because rather than going on a shopping spree, it is a great idea to consider using your federal tax refund money for personal growth. Take a class in something you are passionate about. Travel somewhere that will supplement your life, your career, your self-employed business, your craft, or your trade. Furthermore, if you really just need a re-energizing vacation, and your personal finances are in great shape, go for it!  

There you have it: our top 6 financially savvy ways to use your tax refund dollars. We hope that your tax refund is just what you expect it to be — and possibly more! That way, you can use your extra funds to help get the new year off to a great start or to supplement a financially stable future. For more great tips on finances and using your tax refund dollars, visit Mint’s “10 Smart Ways to Use Your Tax Refund” and the Education Loan Finance blog.