Just because you didn’t set a new year’s resolution in stone, it doesn’t mean you shouldn’t be striving for something in 2014. Goals are great in all walks of life; they give us motivation and drive to succeed. There are few feelings greater than hitting a goal that you’ve been striving for for a number of months.
Setting financial goals is extremely important, without them it can be very easy simply to drift along, often spending beyond your means and causing unnecessary pressure as a result. Your financial goals will be largely dictated by your current financial situation, for example; if you’re currently struggling to make ends meet then planning to pay off your mortgage in the next five years would be wildly unrealistic. Equally, if your finances are in a good place then you need to be ambitious, targets should be attainable, but should require considerable effort to reach.
Throughout this article we are going to offer 5 financial goals for you to aim for this year.
1. Get Free of Christmas Debt
If you are amongst the millions who took out credit or store cards to fund your Christmas spending then your number one financial goal should be to pay it off as quickly as possible. You’ll probably have a date in mind for when you’d like to pay off your debt so now you need to work out whether this date is realistic and ambitious. To do this you need to calculate both how much debt you have and how much you can afford to pay off each month. Budgeting is a great way of doing this because it allows you to assess your income against your outgoings to see how much disposable income you should be left with each month.
2. Create a budget
A budget is the ultimate personal finance tool to have at your disposal. As I outlined above it gives you a clear picture of the state of your finances and allows you to act accordingly in order to improve them. When listing your outgoings it will quickly become clear which areas you are overspending on and can subsequently make cutbacks.
Budgets form the foundations for your financial goals. For example, if you’re looking to pay off debts or save for something then you can use your budget to calculate exactly how much you can contribute each month and then create accurate timescales.
3. Save for a luxury
Everyday life can be stressful, especially when you’re focusing heavily on your finances. This is why it can be a beneficial to get away from it all by treating yourself to a luxury. Think of something you’d really like to do, this may be to go on holiday, buy a new set of golf clubs, a new pair of shoes or a weekend away. By incentivising saving money with a luxury you’ll find that you are never short of motivation or drive to succeed