The beginning of a new year is always a great time to set some goals. Some people set fitness goals; others set self-improvement goals. Although those types of goals are worthy aspirations, I would also suggest making some financial goals for yourself this year. Let 2010 be the year that you start running your finances instead of allowing your money to run you.
Just in case you’re not sure where to get started, here are five important goals that I think everyone should start with.
Get rid of credit card debt. Credit card debt can suck a family’s budget dry faster than just about anything else. How can you possibly start saving for your future (or even just enjoy your money now) when a huge chunk of your paycheck is snatched up by credit card payments every month? Once you rid yourself of that debt you will find that everything else seems much more possible.
Learn to budget. If you’ve never really used a budget as a financial tool, you may be a little intimidated about the process. Let me tell you, though, that budgeting is much easier than you think. I tell my friends who are adverse to the word “budget” to call it a spending plan, instead. Budgeting makes it so much easier to control your spending because it forces you to pay attention to your spending. I promise that once you get this process down, you’ll wonder why you ever resisted it.
Get rid of other debts. Credit card debt isn’t the only kind of debt that poisons your financial well-being. Other consumer debt like car loans, student loans, and other short-term debts can be just as bad. I always suggest that people focus on credit card debts first because they tend to be smaller than car loans or student loans (hopefully), but you should attack these with the same ferocity as you used on the credit card debts. Just think how much money you’ll have to use each month when you don’t have a bunch of payments.
Build an emergency fund. Too many have little or no money in the bank. Unfortunately that lack of savings doesn’t leave them any options when an emergency strikes; they have to use credit cards. I always insist that everyone should have at least $1,000 hiding in a savings account somewhere. After you’ve gotten rid of your debt, you can revisit this goal and build a much substantial savings account.
Start saving for retirement. I know that the idea of retirement seems pretty far away for a lot of us, but you can never start saving for your retirement too early. By starting many years in advance, you can make smaller contributions to your retirement fund and still enjoy a wonderful life in your golden years.
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{ 2 comments… read them below or add one }
There are a lot of options for retirement savings that will lead to security. Investments, annuities, and other savings make all the difference. It is a fact that people need to think about this earlier!
Jerry
For those of us who were ever in the financial crapper at one point in time, probably the hardest one to swallow is the mergency fund. At least it was for me.
However, it really is powerful should you ever lose your job