The Price Makers presents: financial goals to include on your to-do list for the next year!
When the new year comes, people start thinking about the things they want to achieve and their plans to get there. This annual reset is a powerful psychological moment, a clean slate where we feel motivated to build better habits. What I’ve noticed in the last few years is that the winter holidays come with negligence in terms of financial caution, creating what many call a “financial hangover” that can last for months.
With Christmas shopping lists, travel expenses, and tempting end-of-year sales, it’s pretty hard to keep track of your spending. It’s easy to get swept up in the festive spirit and lose sight of your budget. And that’s why you need to set a couple of financial goals! Taking control of your money isn’t about restricting yourself; it’s about empowering yourself to build the life you want, free from financial stress.
Believe it or not, the end of the year is the perfect time to take stock of your financial goals and set some financial resolutions. Looking back at the past 12 months gives you a clear picture of what worked and what didn’t. Many of us tend to be excited about particular things when the new year approaches and then throw them to the wind by February. The key to avoiding this is to create a plan that is both realistic and inspiring.
If you need guidance on the financial goals you should be setting for the next year and a few tips on how to stay on track and achieve them, you came to the right place! We’re not just going to list vague ideas; we’re going to provide actionable steps to make real progress. Without further ado, here are 8 financial goals to include on your to-do list for the next year!
1. Get a grip on your credit card debt
One of the most important financial goals to set for the new year is to be more intentional about what you put on your credit card. High-interest debt is a major obstacle to wealth-building. If you set some money aside to get something on sale but end up spending the following years paying off your shopping spree on your credit card, I’m sorry to say, that you didn’t save any money. In fact, with interest charges, that “sale” item likely cost you far more than its original price.
To start, consider adopting a debt-payoff strategy. Two popular methods are the “snowball” and “avalanche” methods. With the snowball method, you pay off your smallest debts first, which can provide quick psychological wins and build momentum. The avalanche method involves tackling the debts with the highest interest rates first, which saves you the most money over time. Choose the one that best suits your personality.
Another thing that could hurt your credit score is carrying a balance that’s too large. This is related to your credit utilization ratio, which is the amount of credit you’re using compared to your total available credit. Experts suggest keeping this ratio below 30%. The best thing you can do is keep your credit healthy, especially if you plan on applying for a new credit card or purchasing important things, such as a home or a car. A good credit score can save you thousands in interest over a lifetime.
Of course, you can transfer high-interest debt to a low- or zero-APR card or personal loan, but be sure to read the fine print about balance transfer fees and the duration of the introductory rate. Ultimately, the smartest thing you can do to stay on top of your money game and succeed in reaching those financial goals is to be mindful of your holiday spending and develop habits that prevent debt from accumulating in the first place.
2. Pick a discount
Experts recommend you take advantage of rewards programs and credit card points because they can help you reach those financial goals you might be having. Think of it as getting paid a small bonus for the spending you were already planning to do. Over a year, this can add up to a significant amount, whether it’s used for travel, gift cards, or a simple statement credit.
You’ve probably been tempted by cash-back programs before, but don’t expect to see big changes immediately, as big rewards grow over time and with momentum. The key is consistency. A card that offers 2% cash back on groceries might only seem like a few dollars each week, but over a year, that could be hundreds of dollars you can redirect toward another financial goal. However, a word of caution: never spend more than you budgeted just to earn rewards. That defeats the entire purpose and can lead you straight back into debt.
If you use a card for your shopping sprees, make sure it goes the extra mile for you, whether that means cash back or earning points for every purchase. Take some time to review the cards you currently have. Are their reward structures still aligned with your spending habits? For instance, if you used to travel a lot but now spend more on groceries, a travel points card might not be as beneficial as a cash-back grocery card. Once you have enough points, you can start using them. Call your credit card company and ask them what you can get with those credit card reward points; you might be surprised by the options available.
3. Set specific financial goals
As I’ve previously said, one of the things that helps you reach your financial goals is being mindful and specific about them. Vague aspirations are difficult to act on. If you tell yourself that you’re going to save money in the next year, but you have no idea of the amount you want to stash away, it will be easy to lose track of your objective. A goal without a plan is just a wish.
A great framework to use is making your goals SMART: Specific, Measurable, Achievable, Relevant, and Time-bound. Instead of “save more money,” a better goal would be, “I will save $3,000 for a down payment on a car by putting aside $250 every month for the next 12 months.” This goal is clear, trackable, and has a deadline.
Avoid an unpleasant situation by writing down your financial goals and all the steps on how you’re going to achieve them, including a range you plan on saving each month. Breaking a large goal into smaller, monthly or weekly milestones makes it feel less daunting and allows you to celebrate small victories along the way, which keeps your motivation high.
Little things, such as paying more than the minimum amount due on your credit card monthly or canceling subscription services you don’t use, are going to make a big difference in the long run. Conduct a “subscription audit” and you might be shocked at how much you’re spending on services you forgot you even had. These small adjustments may add up to significant savings that can be redirected to your primary goals.
It’s easy to be highly motivated and set unrealistic goals, so try to be mindful and take your routine and spending into consideration when you write down your financial goals, so you won’t lose focus during the process. If your goal is too aggressive, you might burn out and give up entirely. It’s better to set an achievable goal and surpass it than to set a lofty one and fail.
If you plan to get debt-free, start this journey by paying off high-interest credit card bills and non-tax-deductible debt. This is often the most impactful place to begin. While you’re at it, and if you have the option to, sign up for automatic bill payment programs. You’ll steer clear of expensive late penalties, missing payments, and credit score damage. Automating good habits is a powerful strategy for financial success.
4. Boost your savings
If you want to reach your financial goals, don’t forget about a regular savings plan. The most effective way to do this is to “pay yourself first.” This means treating your savings like a non-negotiable bill. Before you pay for anything else, a portion of your paycheck goes directly into your savings. You won’t miss money you never see, so why not create a savings account that will help you keep track of your finances?
You can build stability and consistency if you automatically save a specific amount each month. Set up a recurring automatic transfer from your checking account to your savings account for the day after you get paid. Out of sight, out of mind, so trust me when I tell you that this method works like a charm. You don’t see that money in your daily spending account, so you won’t be tempted to use it for non-essential purchases. Consider opening a high-yield savings account to make your money work even harder for you through better interest rates.
5. Insurance policies
When you set your financial goals for the next year, don’t forget to examine all of your insurance policies, including life, disability, renter’s, and homeowner’s. Insurance is a crucial part of your financial safety net, designed to protect you from catastrophic events that could derail your goals. Are those limits adequate? For example, if you’ve had a child or bought a home, your previous life insurance coverage may no longer be sufficient. It is time to increase the deductibles? A higher deductible can lower your premium, but you need to be sure you have enough in savings to cover it. Can you find a less expensive policy with similar coverage? Are you taking advantage of each discount offered to you by your insurance providers, such as bundling home and auto insurance?
These are important questions to ask yourself when you think about money because it will help you have a clear idea of the things you need to pay and the amount you will be left with afterward. Shopping around for insurance every year or two can reveal significant savings, as rates and offers change constantly. Don’t just auto-renew without checking if a better deal exists. This annual check-up ensures your protection is adequate and your premiums are as low as possible.
6. Emergency fund
Many people make the mistake of thinking that their savings accounts double as their emergency funds, but that’s not the case. Your savings account will help you set money aside for a bigger purchase, whatever that might be, while your emergency fund will assist you in case of a severe problem, such as losing your job, an unexpected major car repair, being evicted, or unexpected medical bills, and so many other things. This fund is your buffer between you and financial disaster.
You should aim to sock away roughly 6 to 12 months’ worth of living expenses so that you’re covered in case of an emergency. If that number seems overwhelming, start small. Aim for $1,000 first, then build from there. The peace of mind that comes from knowing you have a financial cushion is invaluable. That will help you get back on track and not have to rely on high-interest credit cards or sell your assets (like investments) at a bad time to cover an unexpected cost. Keep this fund in a separate, liquid account, like a high-yield savings account, where it’s accessible but not mixed with your everyday spending money.
7. Don’t forget about budgets
Last but not least, don’t forget to experiment with budgets, because that’s how you reach your financial goals in the following year! A budget isn’t a financial straitjacket; it’s a roadmap that tells your money where to go. Whether you use money management platforms or a pen and paper to write down your notes and your goals, you need to experiment with budgets. There are many methods, like the 50/30/20 rule (50% for needs, 30% for wants, 20% for savings) or zero-based budgeting (where every dollar is assigned a job).
An easy thing to do is to break your expenses down into categories: insurance, utilities, groceries, entertainment, nights out, transportation, etc. This will help you identify the areas where you spend too much, and maybe you can find a way to save more. Tracking your spending for a month is an eye-opening exercise that reveals exactly where your money is going.
Don’t forget to also divide them into wants and needs and keep track of what you spend your money on daily. You might be surprised to notice that you get plenty of things you don’t need, such as an overpriced coffee, daily lunches out, or multiple streaming services when you only use one. Identifying these discretionary “wants” is the first step to optimizing your spending.
However, don’t take it too seriously, because that’s not good either. A budget that is too restrictive is likely to fail. If you want to reach your financial goals, you can give yourself a small allowance each month (it can be $20 or $100, as much as you want) to purchase something you want but do not necessarily need. This “fun money” gives you the freedom to indulge guilt-free. That will help you be more accountable because you’ll manage to save and treat yourself at the same time, making the whole process more sustainable and enjoyable.
8. Review and Boost Your Retirement Savings
While tackling debt and building short-term savings are critical, you can’t afford to ignore your long-term future. A key financial goal for the new year should be to review and, if possible, increase your retirement contributions. Compound interest is one of the most powerful forces in finance, and the more time your money has to grow, the better.
If your employer offers a 401(k) or similar retirement plan with a matching contribution, make it your absolute top priority to contribute at least enough to get the full match. Not doing so is like turning down free money. For example, if your employer matches 100% of your contributions up to 5% of your salary, contributing 5% effectively gives you an immediate 100% return on your investment. After securing the full match, aim to increase your contribution by 1% each year. This small, incremental change is often barely noticeable in your take-home pay but can make a massive difference in your nest egg over decades.
If you don’t have a workplace plan or have maxed out your contributions, look into opening an Individual Retirement Account (IRA), such as a Traditional or Roth IRA. Taking a few moments at the start of the year to ensure you’re on track for retirement is a gift to your future self.
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Do you have any other tips on how to reach your financial goals? What specific financial goal are you setting for yourself this year? Leave them in the comments below. They might be useful for other readers, and sharing your goals can help keep you accountable. If you find this article helpful and you’d love to read something else from The Price Makers, I recommend you check out this other post: 10 Best Things You Can Buy On Amazon Under $25
