With the new year fast approaching, we’ve reached that time of the year where we reflect on what we want to get better at and what we want to work on for ourselves. And for many of us, we have financial goals we want to reach. But, unfortunately, most of us don’t like dealing with our finances. It’s so dull and feels way to adultish. I’d rather go back to the days when having the biggest crayon box was important than having a big bank account. (Or having enough money to get by.) But there is no better time than now to think about and work towards a financial goal.
Setting Financial Goals for the New Year
Budgeting is the cornerstone of financial planning. Sticking to a budget helps keep track of where and how much money you spend. For example, we can say to ourselves that we will only spend X amount of money on eating out but until you see it laid out for you, can you know that you stuck to it? Maybe this past month, you had an unexpected bill come up, which threw your whole budget out of whack.
Keeping tabs on where your money is going leads to a better understanding of your spending habits which can lead you to better savings or help you understand why you can’t make any impact on your debt. Whatever your case may be, budgeting is the first step in figuring out where you can do better. If you want to set a financial goal and stick to it, then budgeting will help keep you accountable for those goals.
The last two years have been an unprecedentedly weird time. I tried my best to hoard as much money as possible in fear of losing my job and needing to pay rent, but I would also go crazy locked in my apartment and buy ridiculous things just for the serotonin. But having any savings has been paramount to my ability to get any sleep at night.
Getting out of the cycle of living paycheck to paycheck is hard. No question about it, but there is a sense of peace when you have money saved up that you can’t get anywhere else. Having a six-month emergency fund in case you lose your job is comforting. Also, having some money set aside for medical emergencies will make the emergency less stressful. (I had to take my dog to the animal hospital a while back, and I didn’t have to worry about how I was going to pay the bill. I didn’t have to choose between helping my dog and going completely broke.)
No one likes being in debt. It’s easily the crappiest part about being an adult, but everyone has some debt. School loans, credit cards, car payments, or a mortgage are the big forms of debt for us, and while they can help us build credit, they can also give us crippling anxiety. There is something about owing someone or some bank money that doesn’t feel good. It blows.
Managing debt is a science, not an art. And at the end of the day, it takes discipline and some sacrifice to overcome. Unfortunately, it’s so easy to blow things off and “forget about them” than to take responsibility. But then your credit will tank, and that will only make your life even harder in the long run. But if you feel like you’re drowning in debt, seek some advice from those who know what they are doing. The NFCC can help you come up with a debt management plan.
Being Financially Responsible
I can’t say it enough, finances suck. I’d rather read a book in a language I don’t know than sit down and deal with my finances. It’s like nails on a chalkboard for me. Or maybe I’m still a child running away from my responsibilities. You be the judge of that. I always hated the questions in school that made me think about what my life would be like in five and ten years. But as I’ve gotten older, I don’t hate it as much. I like having a goal to work towards; otherwise, my day-to-day life feels meaningless. (Oh boy, here comes that infamous millennial existentialism.)
The key is sitting down and figuring out what exactly you want to work on, and making a game plan. Then, find ways to hold yourself accountable and ways to reward yourself along the way. Goals should push you to be better, but they shouldn’t cause extreme stress and anxiety. Good luck in the new year with your goals!