Read This Before Setting Your Financial Goals – 5 Resolutions For This Year

This is the year that you will set the right financial goals. Achieving the things you want to do and managing your money the way you have always wanted.

To start this journey you need some financial goals to work on.

Here are the top 5 financial goals and tips on succeeding on every one of them.

1. An Exciting & Personal Goal

You may dismiss the idea of saving for a holiday, a new car, buying a home or anything that gets you excited for more mundane goals. When people think of ‘good’ financial goals they often lean towards things like paying off debt. That’s great and we will come onto that but I believe that working towards something that excites you will help everything else fall into place.

It’s easier to stay on track and keep motivation high when there is something you really want to achieve at the end of the tunnel. Being debt free is a great goal but making it something more personal and something you can feel really happy and emotional about will help.

So make it personal to you.

The most motivated I have been when it comes to finances was when I was working towards our goal of travelling the world as a family of 4. It made some of those impulse purchases or difficult money management moments a lot easier when the idea and excitement of travelling was at stake.

And well… we did it. At least until the pandemic struck and it was awesome.

Read this post if you want to travel and know the best travel card (that we used around the world)

2. Paying Off Your Debts

Something that can stand in the way of hitting your financial dreams are debts. Particularly high interest debts.

In the UK credit card debt alone was an average of £2,252 per household according to themoneycharity.org

Clearing debts will often be a priority when it comes to hitting your financial goals. Having the exciting goal in the background will be a big motivation boost to getting rid of debts, so let’s look at some tips on how to manage it.

You should have a structured plan when it comes to paying off debts. Just paying into different debts when you can is not the best way to do it.

When it comes to paying off your debts quickly and efficiently. Meaning the way that will cost you the least. It’s best to write down all of your debts and arrange them in order of interest rates.

Paying your highest-interest debts off first isn’t always that most satisfying way to do it. You may be tempted to pay off the debts you know you can pay off quicker for example.

However if you use the personal goal you set in step one then you should be able to keep motivated and chip away at the high interest debts first.

It’s also a good idea to get detailed with your plan.

So once you have a list of debts, try to make a calendar of when each debt will be paid off. Once you have a list of dates you will not want to take any longer and again this will help you stay on track.

3. Savings

Building up a savings pot for rainy days is another top financial goal.

I think that this can be a bit of a money mistake though. To have a pot of savings is essential for financial stability. It takes away a lot of the stress associated with personal finance.

To have a pot of money for the sake of having a pot of money is less valuable to me though. It’s hard to get excited about money that has no purpose for me.

So personally I tend to break it all down into sinking funds.

Sure I make an emergency fund too for things I couldn’t account for with my sinking funds but that all gets bundled in. What do I mean? Let me explain.

I will have a pot of money… or sinking fund.. For car repairs, house decorating, tech upgrades and replacements, days out, christmas and more.

When I manage my budget I can decide how much money I am putting into each pot. Having each pot of money have a purpose makes it so much more meaningful and easier to appreciate.

It’s essentially the same thing as sticking it all into an emergency fund, or one big savings account but in my opinion it’s better managed and more rewarding.

You can also set them up for known payments as well as those unexpected emergencies.

Try dividing your annual car insurance cost into 12 and paying that into a pot each month. When it comes to your renewal, the money is there waiting and you often get it cheaper paying for the year instead of monthly but you’ve not had to find all of that money in one month. Making it more manageable.

I love combining this with a zero based budget.

4. Start An Investing Plan

Despite often being talked about as investing, what this is really about is growing your wealth.

Growing your wealth is a top financial goal especially at the moment with the rising inflation. The value of your savings is going down all the time that inflation is higher than the interest rates.

Overcoming that by finding ways to grow your wealth at a rate that is higher than inflation is the goal. It doesn’t have to be investing and investing doesn’t have to be in stocks and shares.

The reason we separate money into a place to store it, such as our pots of savings. Then having another area for growth is often while that money is growing it is less accessible.

Even though when doing traditional stocks and shares investing you can often get your money out straight away you have to time the market. If you suddenly have an unexpected expense pop up it may be at a bad time in the market and you pull some money out at a loss.

That’s why we keep investing money and saving money separate.

It’s also worth taking some time to think about your money mindset when it comes to growing money. If your first reaction to needing some money quickly is to think about what you will cut back on to take the money away from something else.

Instead could you find a way to make the money you need? It’s just another way of thinking and helps put some priority onto making money instead of always looking for ways to cut back and save.

It’s a great trick to play in your head because saving money can only go so far. There is a limit to how much you can get your costs down but not to how much money you can have coming in.

5. Multiple Income Sources

The financial comfort and stability that comes from having multiple income sources is wonderful. It’s the reason it’s on the financial goals list for so many people.

We know why we want it but how do we get money from more than just our job?

Well like most things, starting small is a good idea. If you are completely new to the idea of making money on the side, start with something easy.

Hopefully you get to a place where you have a side business of your own but it’s not always best to start with that as the first step or goal.

So what are some easy to do ways of making extra money?

Selling your things is a good place to start. It will have a limit of course, based on the amount of things you want to clear. If you find it enjoyable and see success here though, you can look into upcycling things to sell or buying and selling.

Another option would be finding one of the many online side hustles you can do from home. These are less work but harder to make any real money from. At least in the beginning.

Do not let that become an excuse not to try them though. This is about getting a taste for side hustles and maybe finding something you like and are good at to start pushing more in that direction.

Some easy online side hustles include, online tutoring, freelance writing, selling crafts on etsy or fiverr, user testing and of course online surveys.

Surveys will usually get the smallest earnings but are the easiest to start with. Try it for a week, enjoy how flexible it is. Understand the benefit of you being in control and what a side hustle can be. If you make an extra £10 that week, it’s not much but it can help and you will see how little ‘work’ you actually had to do for it.

Check out this post for more ways to smash your financial goals

Check out the video below for tips on staying motivated and making sure you hit your goals.