Setting Financial Goals for the New YearJanuary 12, 2017
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!