10 financial goals to set for yourself
Thinking about how you can rock your goals? Don’t forget to set financial ones, too!
Here are 10 smart financial goals to set this year:
1. Create a budget so that you're in control of your money.
Budgeting may not be your favorite hobby, but it can help you spend less than you earn. With a budget, you can stop wondering where your money went and start thinking about where it will go.
Start by categorizing your spending. For example, you could create budget categories for food, rent, savings, going out with friends, Netflix, and so on. Next, look at your total monthly income and expenses. Using your after-tax income (or your “take-home pay”), allot a certain amount of money to different categories in your budget.
You may also want to think about the 50/30/20 rule, which we break down in how to stop spending and start saving.
Tip: Consider using tools like BMO Total Look® to track your income and expenses.
2. Ditch debt for good.
You and debt have probably never really hit it off. Make a clean break by creating a payoff plan to get rid of that financial ball and chain.
First, make a list of all your loans and take note of each balance’s interest rate. Next, focus your efforts on paying the high interest debt first, so you’ll end up paying less total interest over time. Keep yourself motivated by coming up with some milestone rewards (like treating yourself to a fancy dessert after you’ve paid down your first $5k).
3. Put your savings strategy on auto-pilot.
Bigger is better when it comes to your savings account. But let’s face it, saving can seem hard. If you’ve ever felt like “I can’t afford to save” or “I’ll start saving next month,” we have the perfect trick for you: Automate your savings.
By setting up automatic transfers to your savings account from your checking account, you can put your savings strategy on auto-pilot and you’ll hardly even notice the money is gone. Start by automatically saving 10% of your income with each paycheck. You can typically set up automatic transfers online or by talking to your bank. Automating your savings can make the process easier and help you build wealth effortlessly.
4. Invest in yourself.
Want to know one of the best things to invest in? Yourself. It may bring returns on your happiness, success and even salary. Think about what new skills could beef up your resume, and look for learning opportunities in your community or online that could help you move your career forward.
Not only that, think about what you want to accomplish in the future. Do you want to pursue an MBA? Spruce up your design skills or master the art of coding? Become a better writer? Look into resources and classes at General Assembly, Coursera, Udemy and more. By investing in yourself, you can get a leg up in your career and become more well-rounded.
8. Save for future you.
You may not have invested in wrinkle cream or colored your hair yet, but it’s never too early to start saving for the future. Why? Because you have one secret weapon to jump-start your retirement: Time. The magic of compounding interest can turn just a little bit of savings into a large nest egg.
To rock this goal, strive for saving 10% to 15% for retirement through your employer-sponsored 401(k). If you’re eligible, make sure you contribute enough to get a company match, at least! It’s free money and a sweet job perk. Also, consider getting extra tax benefits by contributing to a Traditional or Roth IRA.
If you work for yourself, you might want to check out retirement plans for self-employed people. Options like a SEP-IRA can help you save for retirement on a tax-deferred basis, just like employees on company plans.
9. Educate yourself about personal finance.
Knowledge is power. Commit to educating yourself about money and personal finance. Learn about the many options available to you when it comes to saving for the future. Novice savers can become savvy wealth-builders with just a bit of training.
Consider curling up with a book to start learning more about personal finance; get started with this list of the most important finance books from Business Insider. Your future self and nest egg will thank you.
10. Sit down with a financial advisor.
Still not sure where to start on your financial strategy? Consider sitting down with a financial advisor.
By taking a look at your entire financial situation, they can help you establish a customized plan designed to meet your short- and long-term goals. Then, your financial advisor can help you select suitable products and services designed to put your plan into action. (Our friends over at BMO Financial Advisors may be able to help.)
Commit to making your finances a priority and set financial goals for yourself. You got this!
Footnote 1 details BMO and its affiliates do not provide legal or tax advice to clients. You should review your particular circumstances with your independent legal and tax advisors.
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