Do you feel like your financial goals are too far out to reach?
With a new year comes new opportunity to better manage your money so you can spend more time focusing on the things you love. However, it can be overwhelming to know where to start. That may not be the case, if you use the right approach.
Here are 4 simple ways to reach your financial goals in 2019.
1. Make a budget
Many people get overwhelmed with the idea of making a budget, but it’s actually quite simple. Whether you want to buy a home or retire without debt, you’ll have a much better chance of reaching your goals if you create a plan of action and budget accordingly.
Start by filling out your personal budget worksheet and see how much money is coming in and going out each month. By keeping a close eye on your expenses, you’ll be able to identify any spending leaks, make necessary adjustments to save more, and prioritize where your money goes each month. Healthy finances always start with a healthy budget.
2. Get your spending under control
Once you have a clear picture of where your finances stand, it’s time to fine-tune your budget so you spend less than you make. Make sure to cover necessities first and get rid of any expenses that don’t add much value to your life. That way you’ll have more to put towards your savings and financial goals.
There are plenty of money-saving tips and pain-free ways to cut back. Perhaps you could dine out less, or reduce your energy costs, or even downsize to a smaller home. The savings can really add up over time and get you another step closer to your financial goals.
3. Start building your emergency fund
If money is tight, there may not be much left over after you calculate your necessary monthly expenses and what you hope to save. But it’s crucial to set aside some funds to cover unforeseen situations. In fact, building an emergency fund is arguably the most immediate and critical of all savings objectives.
Life is unpredictable and no one knows when a layoff, major home repair, or medical emergency may come up. Depending on your situation, experts advise having at least six months’ worth of living expenses set aside in a savings account. Otherwise, you could end up resorting to credit cards when you’re in a bind, and that could quickly set you on a downward spiral. In the short-term, you can reduce–but not eliminate–your monthly savings goals while also trimming spending.
4. Get rid of your credit card debt
Freeing yourself from credit card debt can improve your life in just about every way. Not only does it free up extra money in your budget, it could also help reduce your financial stress. There are many ways that you could get out of credit card debt depending on your current financial situation.
If you have extra cash coming in each month, you may want to consider using that money to start paying down your debt more aggressively. On the other hand, if high interest rates are holding you back from making a dent in your credit card bills, transferring your debt to a card with a lower interest rate may be the right option for you. No matter how you choose to handle your situation, getting out of credit card debt could help you reach your financial goals faster.
With these 4 simple tips, you can start improving your financial life and be better equipped to reach all of your financial goals in 2019! And, with your thoughts no longer locked into the constant pattern of worrying about money, you can finally devote more energy to family, friends, and the things you truly enjoy in life.