Happy New Year everyone!! I hope everyone had a great 2018, but I’m hoping for an even better 2019. As is typical, I like to start the new year with some resolutions, or as I prefer to call them goals. Most importantly, I set my financial goals for the year. It’s great to start the new year off with a fresh perspective and working towards reaching a goal. Here are some ideas for financial goals for the new year.
Contribute the Limit to Retirement
There is a limit for how much you can contribute to your retirement accounts in each year. According to the IRS, for 2019, these limits have increased for both employer-sponsored plans and individual retirement accounts (IRA). The limit for 401(k) or 403(b) plans is 2019 in $19,000 (up from $18,500 in 2018). The annual limit for contributions to your IRA is now $6,000 (up from $5,500 in 2018). A good financial goal for the new year is to contribute the maximum to at least one of these plans, if not both. You will thank yourself years from now when you retire.
Spend Less Money
This is a pretty broad financial goal, but it’s a good one. If you have a budget and monitor it closely, you may notice some areas that you could cut down spending on. If you are not budgeting (though I highly recommend you do budget in some form), credit cards often issue an annual spending summary review which will also allow you to see what categories you have spent the most and least on. It will be interesting to see how much money you are able to save by simply spending less on even one thing. For example, set a goal to spend less on buying coffee out or takeout food and by the end of the year you will be shocked to see how much you have saved.
Save More Money
Hand in hand with spending less is saving more. If you are spending less on one category, you will be saving more, as long as you don’t use that money to spend more on something else. Generally speaking, it is easier to reach a savings goal if you are saving for something specific. If you decide to set a goal to save more money, save it for something like a vacation, retirement, a house, a new washer/dryer, renovations, etc. When you are working towards something specific, you are more likely to be motivated to save the money.
Make More Money
Make more money may see like an unattainable goal; however, that really depends how you look at it. You may think that the amount of money you make is out of your control because your salary is set by someone else. While this may be true for some jobs, it is not true for all. If you are serious about making more money, mention this to your boss. Ask for a higher raise and if you are turned down, ask what you can do to obtain a higher raise. If you salary is capped for whatever reason, you can look outside your current job to make more money
Side hustles are a great way to make more money and something that you have complete control of yourself. Some ideas for side hustles that you can do while working full-time are blogging, pet sitting/walking, babysitting, bartending, selling things on the internet, photography and so much more. Some of these things can become and are full-time jobs, as well, but when you are working on a side hustle it is up to you how much time and effort you are willing to put into it.
Pay Off Debt
By setting a goal to pay off debt, you will likely need to make some tweaks to your spending habits. Rather than paying the minimum payment, you should use excess money to make larger payments. In order to have excess money, you will likely have to cut back spending somewhere else or put less money away towards savings. While debt is a regular part of most people’s lives, it doesn’t necessarily have to be. If you scale back on certain things in your life, you may be able to start living debt free. Maybe that means sacrificing a year of living on your own and moving back in with parents; maybe that means only ordering takeout once every two weeks; maybe that means driving your really old car for just two more years. Once your debt is paid off you will be happy to have made those sacrifices, though.
While financials goals are great, sometimes it is impossible to meet all of our goals. It’s okay if you can’t pay off your debt AND max out your retirement contributions. The thing about goals if you have the prioritize them. If you cross one goal off for 2019, but are unable to meet another goal, there is always 2020. We set goals so that we have something to strive for, but if we are unable to achieve them, it’s still okay because at least we can say we tried.
